Question: As a small business owner it is important that I have repeat customers and that those customers recommend my business to others. What can SCORE suggest as some good methods to encourage and acquire customer loyalty?
Answer: Every successful business, sports team or group has a “go-to” player, someone who can be counted on to perform and deliver whatever is needed in specific situations.
As a small business owner, you want your firm to be a “go-to” resource for your customers, the place they’ll turn to whenever they need a certain product or service, regardless of other options that may be available.
To achieve that distinction, you have to develop loyalty among your customers. At first glance, that might seem easy to do; give them what they want, and they’ll come back, right?
Not necessarily. Customers always want to feel valued and know that their specific needs will receive special attention. But building customer loyalty has become more challenging with the convergence of trends such as easy access to data about competing companies, more price- or location-driven purchasing decisions due to economic factors, and a sense of greater expectations of value from that purchase.
Both businesses and consumers have recognized the value of loyalty programs. Only 12% – 15% of customers are loyal to a single retailer, according to the Center for Retail Management at Northwestern University. But that small cadre of shoppers generates between 55% – 70% of the company sales. Some food retailers find that as much as 65% – 95% of their sales go to members of loyalty programs (53% of food retailers offer loyalty programs with 3/4 of program customers using their loyalty cards at least weekly and 88% at least once a month). ( See CRM Trends for more information).
Fortunately, there are many tactics to foster customer loyalty that can be easily integrated into your day-to-day operations. A simple “thank-you for your business” will go a long way, but so too will a personalized thank-you note, especially in the digital age. Don’t cut and paste sentiments or use a form letter; think about what those customers have needed, and let them know you appreciate their business.
Creating value will help boost loyalty. Ask your customers if there is anything else you could be doing for them. Then, after they tell you, do it. If you blog or send an e-newsletter, include some stories or links to topics they may find interesting, or relate the value of your products or services in an engaging, social way. You may also want to consider incentives such as discounts or freebies for frequent customers.
Review each customer “touch point”—your phones, your website, your store—to determine the kind of reception customers get, and how helpful each one is from the customer’s point of view. And make sure your employees also feel valued. When they feel good about working for you, they’ll give customers an even better experience.
Even if your best efforts fall short and a customer goes elsewhere, you can still gain from the experience. Ask them why they switched. If there’s something you can change or improve on, do so. You may not regain that customer, but you can use that input to better serve the customers you have, and those you hope to attract in the future.
And … include your SCORE mentor in this process. He or she has acquired priceless experience in the business world and you can benefit from their knowledge of how to add value for your customers and inspire loyalty.