Tips for Reducing Customer Turnover
It’s a fact of life in the business world. Customer attrition will happen and we as small business owners have to accept that. However, there are steps that can be taken for reducing customer turnover.
Recognizing Your Most Valuable Asset
As I have mentioned in my previous small business marketing advice article, your existing customer base is your most valuable asset. That is a fact that should be recognized, appreciated and optimized for your greatest marketing ROI. Customers who have already purchased from you are more likely to purchase again, more likely to refer their friends and associates and the average transaction per sale is usually higher. Those are all important metrics that contribute significantly to the long-term success of any business. Reducing customer turnover can certainly keep more profits in your bottom line.
Don’t Be Afraid Of Customer Complaints
I’m sure we have all had the experience where we had a problem with a product or service that we purchased from a particular company. Yet the outstanding way in which they handled the situation had no negative effect on the relationship and the net result made the relationship even stronger. That has happened several times with me. Many companies may seem good on the surface, but it is a real test of what they are made of when we have a customer service issue that needs to be resolved.
Complaints Can Be Opportunities
First of all, if you promote yourself as a business with integrity and you stand behind the product or service you sell, here is your opportunity to shine. If you fail to stand behind your word, you have not only lost that customer but many others. People are far more likely and willing to share their bad experiences with a particular company than they are their good ones. That is important factor to keep in mind. Secondly, if you are experiencing several complaints, welcome this as an opportunity to fix some issues within your organization that you may not be aware of. This could be a problem with a particular employee, the quality of a vendor’s product that you sell, the weakness of a particular company policy that you have or any number of other situations like that. Those types of things ultimately hurt your business and profitability, but they may not be apparent until some of your customers bring it to your attention.
It Is Easier Than Ever To Lose Customers
As much as I believe the Internet to be the greatest marketing environment we have ever seen, it can also make it tougher to retain your customer base. With the multitude of review sites out there is very easy for your customers and prospects to research both you and your competitors. Therefore it is more important than ever to make sure your customers are happy. I study a lot of these review type sites and the two biggest complaints I generally find are either the product or service provided low value or the company did not stand behind their word to fix the problem. Both of these situations can be easily avoided and doing so is extremely valuable to maintaining a positive reputation in the online world. If you reduce the amount of customers you lose, you can add to your profitability and long-term stability.
Inspire Customer Loyalty and Participation
Here’s a time to get creative and make sure you reward the customers who have been with you the longest. Remember those people believe in you and your product or service and have probably referred more business to you than anyone else. One of the stupidest marketing moves but I frequently see is some special discount or bonus offer that is “Valid for new customers only.” Talk about a slap in the face for those customers who have stood behind you. Those are the ones that should get the best deals.
I have talked to some business owners who are reluctant to have a customer rewards program or offer special incentives or discounts to existing customers over and above their other prices. They are afraid they would be losing money. Quite the opposite is true. The more you reward your customers and show them your appreciation, the longer you will have them and the more valuable they will become to you and your business.
You should now be aware of some customer retention factors that you may have not considered previously. By implementing some of the suggestions I have made above, I believe you can retain more of your current customers and build a stronger, long-term customer base.
