Why are your customers leaving you?
For small businesses, loyalty is king. It typically costs 5 times more to acquire a new customer than to keep an existing one. Existing customers can be worth more, too—they are 50% more likely to try new products and 31% more likely to spend more than new ones. But despite these telling statistics, customer loyalty is underrated. In fact, 44% of companies focus more on acquisition than retention.
It should be therefore clear that customer retention can be a huge differential for small businesses. With customer churn at between 10 and 25% a year for most companies, savvy business owners who can lower that figure stand a good chance of getting ahead of the pack.
So the question today is: Why do customers leave, and what can you do about it?
Your customer service isn’t good enough
Take a deep breath for this one: a staggering 75% of customers say they’ve left a business because of bad customer service experiences. When it comes to retention, providing great customer service is the single most important thing you can do. While we won’t go into the most obvious and easy ways to make your customers happy here, one aspect that is often overlooked regarding customer loyalty is employee churn.
Keeping the same friendly faces that your customers are used to, and that know them, can have a significant impact on retention. After all, people buy from people. So if you look for ways to keep your employees loyal and you'll indirectly also be keeping your customers loyal.
If a customer has had a bad experience, all is not lost, but make sure to rectify the situation as best you can. A personal connection is key here, so reach out and provide them with some incentive to give you another chance, like a hefty discount off their next purchase.
Their loyalty isn’t rewarded
No one likes to feel they aren’t treated as well as others, and existing customers feel the same about offers designed to entice new business. Never lose sight of the fact that your long-term, loyal customers are your most valuable.
As well as rewarding them regularly for that loyalty, make sure that you know what these customers want, and continue to focus on those products. If you have a product or service that no one buys, except for the handful of customers that comprise 40% of your sales, you best keep offering that!
You don’t focus on value
Business is a tough, competitive world. Whatever loyalty your customers have, they’ll be tempted by some other business who is offering them a similar product but undercutting you on price. The key is therefore not to focus on price, but on the value you deliver.
Make it worth their time to stick with you, through offering tangible features and rewards, as well as intangible benefits like your outstanding relationship with them and a deep understanding of both what they do and what they need.
You can have the best product in the world and a wonderful team selling it, but if your checkout process takes half an hour instead of the two minutes it should, you can bet no one will be buying!
Technology is an enabler, and in the modern world that means it can make almost anything quick, easy, and painless. Review all the steps customers have to go through to give you their money, and then work out how to make it faster and smoother.
If you’re bringing in new ways of doing things, from accepting more payment methods to offering a ‘click and collect’ service, let your customers know what’s happening and how they’ll benefit. And never take away a feature they use and love without consultation and explanation aplenty.
Lastly, make your business easier to find! From takeaway apps to Google Maps and social media, the way people want to find you is the way you should let them. You can also find more social media tips here for growing your business on Facebook, Twitter, Instagram, LinkedIn, and YouTube.
In conclusion, keeping existing customers happy and loyal should be your priority and firmly set at the heart of your business model. And with these tips, you should be able to do just that—best of luck!