Let’s Talk About Customer Loyalty
We talk with small business owners about their marketing efforts and hear this:
“I guess no one reads the newspaper anymore because those ads I buy do nothing.”
“Apparently people just throw away the coupons we send out in our direct mail efforts because we don’t even make our money back on those things, much less make a profit.”
“Radio does nothing for our business and we can’t afford TV.”
“Amazon Local Deals and Groupon deals give me a lot of customers for a few days, but I don’t make any money on them and, plus, I never see them again after the deal is over.”
“I can’t even begin to figure out Google advertising myself, and when I hire someone to do it, their fees suck up whatever margin I might have had.”
“Yeah, we have a Facebook page and a website and I know I should put updates and content on it, but I have a business to run, and I don’t have any other employees to do that on a regular basis, and I can’t afford to pay someone to do it, so we hardly have any “likes” or “friends” and I haven’t updated my website for over a year, so we’ve had zero results from being on the internet.”
Sounds pretty expensive and pretty bleak, huh?
Well, yes, it does. But the acquisition of new customers is a topic for another day. Today we’re going to focus for a minute on customer retention and making your loyal customers into advocates for your business.
First of all, be honest. You know customer loyalty is important, but do you actually do anything to encourage it?
Do you have a frequent-buyer program where your customer buys 5 or 10 of something, and then gets a free one of that something? Do you communicate with your current customers on a regular basis, and offer them discounts in those contacts? Do you provide at least good service levels to all your customers and great service to your frequent customers? Do you acknowledge your good customers when you see them or are contacted by them? Do you thank them for their business? Do you offer them some small premium to join you on Facebook or Google+ or LinkedIn (you know, those social media sites that aren’t doing anything for your business)?
And, on the subject of making your good customers into sales agents for your company, do you offer referral fees of some kind? Do you send them emails with specials and/or post those specials on Facebook or your website or Google+ so that your satisfied customers can easily forward the same offer to people they know? Do you mention to your good customers that it would be helpful if they could share with others their happiness with your business?
Because, all of these things either cost no money or very little money, and the payoff is huge. I know you’ve heard this, because it’s been said since the late 80’s – it costs an average seven times more to get a new customer than to keep an old one. In some business segments the ratio is less; in some business segments the ratio is much more.
For some small businesses, the new customer acquisition strategy is simply just to keep their current customers. Nothing more, nothing less. And it works! The customers not only don’t leave, they tell other people over and over again how happy they are, and that’s how that business gets their new customers – by word-of-mouth from existing customers. The original viral marketing method.
Now is the time to get started – there is no immediate, big return on customer loyalty efforts, but rest assured, the return is substantial, long-lasting and produces other positive effects for a small business besides revenue. Don’t put it off any longer; now is the time to start your customer loyalty efforts.