Getting customers can be a tough job. You usually would have to spend money and time to get them patronizing your business. Once you get these customers, one thing that should’t be happening is you losing them cheaply without maximizing their life time value.
The trend these days is for businesses is to spend so much on getting customers and then do a poor job of keeping them. We liken this to a leaky bucket.
In your mind, picture a bucket of water with holes.
The bucket is the product or service your business offers and water represents customers. Holes in your bucket means, for some reason customers drop out or stop patronizing your business (churn).
Clearly, the goal for every business is to keep their bucket filled with water.
If that analogy makes sense, filling up the bucket with water is customer acquisition. Preventing the water from flowing out is customer retention-i.e fixing the holes, building customer loyalty and getting churn to the barest minimum.
To keep the bucket filled with water, a business can achieve this by mainly one of these 2 approaches:
- Keep filling water so fast such that the bucket would always have water no matter the holes in it. (Getting new customers).
- Fix the holes in the bucket, pump in at a much lower rate and eventually fill the bucket. (Keeping the customers you have).
It is pretty obvious that approach A is wasteful and not sustainable. It would very much cost much more than approach B.
Putting this in business perspective, it is costing businesses 5-6 times more to get new customers than to keep the ones they have.
3 Tips
Here are 3 powerful tips to keep your business from getting into a leaky bucket situation.
- Deliver Personal Experiences
You know the feeling when you walk into a store and the store keeper you have never met before welcomes you by your first name, that’s delivering a personal experience at the very least, and it can get better.We are in a time when having a direct personal relationship with our customers is key to our long term success as a business owner. As a merchant that may have customers in thousands, a question on how to scale individual personal interaction may arise, but with the right technology tools, this is absolutely possible. However and by all means deliver personal experiences with or without tech. - Not Every Time Sell
It’s not every interaction we get with the customer we should see as an opportunity to sell. Even with a sales hat on, you can’t be pushy all the time, you should only be pushy at the right time. If you know the other interests of your customers, that’s a good talking point. Call to ask about their family, ask if there is anything you can help with. You don’t have to be in the position to help, you only show you care by asking, and that’s powerful for making them stick. For a moment, forget you are running a B2C or a B2B kind of business, successful businesses do H2H, because at the very core of the interaction, is the Human entity on both ends. - Reward Customers
The idea behind rewarding your customers is to give them one more reason to keep doing business with you. Rewards help to incite loyal buying behaviors in customers and can be used to motivate customers to take certain actions like buy a particular product or give feedback. Rewards are a core part of customer loyalty programs. One important rule to bear in mind is to ensure that the value delivery is 2 way; the customer is rewarded for repeat patronage, and the business increases sales.
To wrap this, I really do believe businesses don’t have to spend so much to build a profitable business, they can thrive without having to keep focus on getting customers. All that would be needed is a shift towards loyalty based marketing tactics.
References
http://smallbusiness.chron.com/retention-marketing-74708.html
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