Well, your’re going to have to keep reading to find out.
You didn’t think that you were going to find that out within the first paragraph did you?
I hope not.
[tweet_box design=”default” float=”none”]It costs 5 times more to acquire a new customer than it is to retain an existing customer[/tweet_box]
I bet you already knew that didn’t you?
If you did great. If not, that’s okay too.
Why should you keep reading until the end of this blog post?
- You’ll learn more from a statistical perspective why customer retention is so darn important to you as a small business owner.
- We’ll tell you the secret ingredient
Sound like a plan Stan?
Stop. Before we move on you should really check out this blog post that was written recently by none other than yours truly about customer retention strategies for your business. It will only take a minute of your time.
Recommended Reading: Customer Retention Strategies For Your Business
Statistics on customer retention strategies you need to know.
Let’s dive into statistics on customer retention that you need to know.
- A commitment to customer experience results in up to 25% more customer retention and revenue than sales or marketing initiatives. (Sources: Gartner Group and “Leading on the Edge of Chaos “, Emmett C. Murphy and Mark A. Murphy)
Let’s analyze that for a second. If all you did was make your customers happy by providing them with a pleasant experience every time you communicated with them either via – phone, email, or social media. You would retain more of your customers, which increases your bottom line.
Seems like a no-brainer to me.
What do you think?
Also, by being committed to providing a positive customer experience as we just said you can slash your sales and marketing customer acquisition costs, which increases your profitability.
It’s a win-win.
- Repeat customers spend 33% more than new customers. (Source: Laura Lake)
That’s a third more as compared to what a new customer will spend initially. Not to mention that it costs 5 times more to get a new customer as opposed to keeping one you already have.
In an effort to maximize:
- sales and marketing efforts
[tweet_box design=”default” float=”none”]You should concentrate on making your existing customers feel special and keep them happy.[/tweet_box]
Does this resonate?
What’s the benefit in making your customers happy and making them feel special as was previously alluded to?
- Satisfied customers tell 9 people how happy they are. (Source: AllBusiness.com)
Which means that your likelihood of gaining new customers is extremely high. Does that mean you’ll get 9 new customers?
Ah, no. Probably not.
If you get 2 to 4 new customers from those 9 people, would you take those odds?
You bet your bottom dollar you would!
What makes this all possible is the power of word of mouth? Yours truly wrote an in-depth blog post on this very subject. So, do yourself a solid and go read this blog post. Then come back to finish reading this one.
Recommended Reading: New Customer Acquisition By Word of Mouth
- 61% of small business owners report that more than half of their revenue comes from repeat customers, rather than new business. (Source: BIAKelsey)
That’s an overwhelming statistic that further supports what we’ve been saying all throughout this conversation today.
A majority of your business comes from existing customers, which means you need to take care of them!
Also, which is not part of this statistical conversation but is pertinent. You can double your revenue and profit by:
Increasing your revenue per customer.
By selling your existing customers additional products/services in which they’re not currently buying from you.
How hard would that be for you to do?
It would not be hard at all.
All you do is pick up the phone or shoot an email and you’re done!
Can you do that?
Of course, you can.
So, don’t wait. Go do it right now! Wait a couple minutes until you’re done reading this blog post though.
Another way to increase your customer retention is to have customer loyalty programs in place and/or some form of loyalty cards.
You’re getting closer to finding out what the secret ingredient is, so stay with me.
Sound like a plan?
Customer retention using customer loyalty programs and customer loyalty cards.
Let’s discuss some facts and figures regarding customer loyalty programs.
- 58% buy from stores and brands whose loyalty programs they belong to at least once a month. (Source: DailyBreak Media)
So based on that information your customer is more than likely to buy at least once a month if part of a customer loyalty program.
What are your thoughts on that?
I know that it is only one statistic in regards to customer loyalty programs, but if you implement a customer loyalty program in your small business chances are more than half would buy at least once a month.
Do you like those odds?
I sure do. I would take that every day of the week and twice on Sunday!
- Only 34% of small business owners have any customer loyalty programs at all, and of those who do, the majority are offline. (Source: BIAKelsey)
Why do you think that percentage is so low?
Perhaps, small business owners don’t think that the ROI is there?
I don’t know the answer.
But, what I do know is there is an opportunity there for you to generate more new business fairly easily.
I guarantee you that your competition does not have a customer loyalty program in place, so that means you should implement one. Gives you a leg up on your competition and you can steal their business.
- 64% of retailers say their loyalty/rewards program is the best way to connect with consumers. (Source: Forrester)
Customer loyalty programs is another touch point you have with your customers. The more touch points you have with a customer the more likely you can keep them happy and retain that customer for the long haul.
Which should be the goal of your small business – retain your customers for the long-haul!
To clarify most of these customer loyalty programs have loyalty cards for you to present and/or key in your code when buying either in-person or online.
Another good thing about loyalty cards is that those cards are usually on your key chain which keeps that brand/ small business top of mind.
Do you follow?
So what is the secret ingredient in customer retention strategies for small business?
More specifically, doing everything in your power to make that customer feel special and keep them happy!
When you do this word about your small business spreads like wild fire, which increases your ability to not only retain those customers, but acquire new customers without having to lift a finger.
How’s that for a customer acquisition strategy?
I know it’s very simple, but it’s so true.
Issue is that you as a small business owner are more concerned and/or caught up in the strategy rather than what actually matters which is the customer.
So pay more attention to your actual customers in keeping them happy and making them feel special.
Can you do that?
Do you have a customer acquisition/customer retention process in place for your business?
Is that process working?
Is that process efficient?
Is that process cost-effective for your business?
If you could improve that process would you?
Do you need help in figuring out which parts of your process should stay or go?
If you’re answering “Yes” to all of these questions then my hats off to you. Business must be awesome!
Otherwise you and I should talk. Let’s see how I can get you to where you want to be.