Some businesses are so focused on marketing and growing their business that they don’t see the massive lost opportunity of retention. A business can be thought of as a cup. The bigger the cup the more customers you can handle and sell to. Filling that cup through marketing to vital to the growth of your business, but every business has a big hole on the bottom of their cup.
The big hole is your retention!
A small increase to your retention rate of your customers plays a huge impact to your net profit. This is because customers have exponentially more valuable over time. They purchase multiple things and they natural promote your business for you. Think about a coffee shop that increased its retention rate by 1%. That’s thousands of cups of coffee over a year if they have 1,000 customers a day, which is reasonable. Focusing on marketing is important, but not if you lose most of your customer once you gain them.
Can you be perfect? No! There is no business on this planet that has a perfect retention rate, because of people moving, satisfying customers needs, and changing preferences. Dozens of factors play into the role of retention rates. You can always improve this rate, but it will never be perfect.
Ever business uses different things to retain customers over long periods of time. What works for you doesn’t always work for others. Its all about trial and error. Here are a few ways to retain customers more effectively:
- Connect with customers on a personal level by telling your story
- Utilize social proof by sharing testimonials and your audience
- Use words your target market wants to hear like free or organic
- Focus on helping people fix problems more than offering solutions to anyone
- Try to offer value and gifts to customers without expecting a return
- Balance quality with speed (depending on your business)
- Focus on all the little details of customer engagement (how you serve a coffee to customers)
- Customize as much as you can for each customer
- Reward customers for good behavior
- Know your customers names
These are general things that you can do to improve customer retention. There are many details on websites, through customer service, and engagement that go far beyond this short post. Its all in the details and all about what works. Everything from setting customer expectations to building trust and relationships.
The best thing to do is simply ask your customers what they want. They might not always be right, but they can definitely help guide you in the right direction. Beyond that, you can seek professional advice and consulting. All this talk about coffee…I’m off to grab a cup!
Thank you for reading. I hope this helps and let us know if you have any questions!