Running your business fine and well, with improving sales and traffic of purchasers, is just one of the few things that a moving business will show. But all these will only last so long. A business must also remember that retaining current customers is equally, if not more important than obtaining new ones.
Customer retention is a cost effective and very profitable strategy, but in order to ensure the longevity of a business, it is by all means a must in every business plan. Just remember, 80% of sales come from an estimated 20% of your entire customer and clientele base.
In the old world, many advertising and marketing efforts were created based on the pretense that ‘more of new, is better’. Most of these campaigns were built solely to attract and obtain customers from competitors or customers who have not yet been exposed to the products or services.
In the new IT based economy, customers are more learned, more sceptically, and much pickier. This makes for a much tougher crowd to please, thus making the margin of ‘new’ customers turning up in front of your shop less.
Business owners need to rethink advertising, marketing, as well as sales strategies to ensure that they come up with something new, refreshing and catchy; to fish out customers who already have strong opinions and many options before them.
Over your years conducting business, you would have at least once heard that it is five times more cost effective to retain current customers as compared to that of acquiring new ones. Grocery stores emphasize on god customer relations, restaurants provide much better services (with smiles and chatter), and even regular retail outlets offer loyalty cards. What is this telling you?
The world has changed. Once the customer was a nameless entity, purchasing solely to fatten bank accounts and go through products without recognition. An example of why businesses fail is because they don’t even know why they failed in the first place. When your nameless customers disappear, you will be unable to ask what caused them to jump the ship. The crucial part knows how they FEEL about YOU.
Customers of now are treated as friends, as people with names and different personalities. This way, you reach them on a personal level, to remember them, understand them, and know why they buy what they buy from you.
We need not fraught about the revelation that we must know each and every one of our customers. There are plenty of solutions out there in the form of sophisticated technology and database equipment (which now has ballooned into a thriving itself) which has made it possible for industry businesses to make the attempt at improving their customer relations.
These are transcribed by database marketing programs which then move businesses up the recognition level in their customers minds, on the way to retain them permanently (well almost). Establishing a detailed client database allows businesses to keep track of each individual customer’s personal information and preferences.
With this, businesses would be able to provide better service and what those individuals perceive as ‘value’, improve repeat sales, and more customer referrals. Remember that to achieve the objectives of a customer retention program, the entire campaign should be designed around the customer.
The exercise will only be effective if the customer recognizes and associates some value with being part of your database. If they do not perceive any form of in the program; all of your ‘value’ communication messages, coupons, loyalty schemes, special offers, and personalized newsletters will be automatically junked.