Some small businesses hoping to maximize revenue generation may target new customers through creative, low-cost advertising. However, successful business owners understand fostering existing customer retention comes with immense benefits.
While small businesses may not have sufficient resources to create extensive reward customer retention programs, they can still leverage many cost-effective approaches to guarantee a high customer retention rate.
This article will discuss effective customer retention strategies all small businesses should know.
The Importance of Customer Retention
Customer retention can guarantee a more profitable outcome for your small business when properly executed.
Existing customers are more likely than first-time customers to buy more and even recommend your brand to others. Recommendations or referrals are one practical approach to promoting your small business without spending much. In addition, you're more likely to sell new products or services to an existing customer than to convert someone who has not used your products or services yet.
Therefore, as a small business owner, having a loyal customer base you can count on can be very reassuring. This is especially true when you regularly launch new product offerings or add new features to existing products. With dedicated and loyal customers, the continued success of your business is guaranteed.
6 Small Business Customer Retention Strategies
As a small business owner focusing on profitability, your biggest priority is to earn your customers' trust. Once your customers have faith in your products or services, it assures their loyalty. With loyal customers, your business can go much further in terms of sales and revenue. Here, we detail the six best customer retention strategies to help you keep your loyal customers.
Focus on Customer Service
As a small business owner, keeping existing customers is dictated by your availability to answer their questions and provide relevant solutions to their problems. One practical approach to achieving excellent customer support is through efficient customer service.
In fact, 90% of U.S. consumers factor in customer service when deciding whether to do business with a brand. Also, 92% of consumers who experience positive customer service are more motivated to make another purchase. These statistics underscore the relevance of high-quality customer service to small businesses.
Excellent customer service enhances effective communication between you and your customers, enabling you to provide the right level of support, thus guaranteeing customer satisfaction. The idea is to help you understand customer needs better to meet such needs and expectations.
The bottom line is — apart from quality product and service offerings — effective customer service is the recipe to strengthen customer relationships and loyalty. It also decreases customer churn rate and increases customer retention rate.
To minimize response time and maximize customer service efficiency, you can set up a chatbot on your website, provide follow-up emails, leverage social media channels, use mobile apps, or provide phone help-lines. These tools enable you to handle customer complaints and turn unhappy customers into happy and loyal customers.
Additionally, you can integrate social media with customer relationship management (CRM) software. This provides a hassle-free means of managing customer relationships across the customer life cycle.
Personalize Products/Services
Understanding how your customers feel about your products or services or how unique your offerings make them feel can yield benefits in terms of customer retention and decreased churn rate.
In fact, 80% of consumers favor brands providing personalized experiences and are more likely to purchase from such brands. Most customers are willing to share their personal experiences with your product or service to help you develop new features with their satisfaction in mind.
Besides product personalization, you can also leverage other forms of personalization:
- Marketing personalization: This includes using CRM data to enhance customer experience, sending personalized emails, creating a meaningful thank-you page, and opt-in forms.
- Sales personalization: Sales personalization is achievable through personalized sales follow-ups and real-time chats with prospective customers.
- Customer support personalization: This encompasses knowledge-based targeting of customer needs using CRM data, context-based support services, and fast resolution of customer complaints.
There's no better way to increase and sustain customer engagement with your brand than adding a sense of personalization to your products or services based on customer behavior and personality.
Encourage and Respond to Customer Feedback
When you know your customers' feelings about your product or service, it becomes easier to improve on customer experience. There's no better way to gauge customers' feelings than reviews and customer feedback. Therefore, it is important to encourage your customers to provide feedback based on their experiences with your products or services.
Passionate customers like it when you ask them for their opinion about your brand. It shows you're committed to meeting their core needs. In addition, customer feedback can give you an idea of your customers' pain points, reflecting on the problems they encounter in their customer journey. Your ability to follow up on the feedback goes a long way to ensure client retention and decrease customer churn rate.
All the approaches adopted in customer service like live chat, follow-up emails, social media channels, etc., also work well for feedback. However, another excellent strategy you can adopt in collecting current customers' feedback or review is through surveys. Survey tools like JotForm, SurveyMonkey, and Typeform are cost-effective, easy to use, and have templates to help you get started.
Use a Subscription Model
Subscription marketing is an effective ongoing marketing strategy and it can help small businesses and marketers create and keep long-term repeat customers. According to McKinsey & Company, about 15% of those who shop online have signed up for at least one subscription.
A subscription model is an excellent way of regularly reminding customers about your new products or services. Thus, you establish long-term relationships, which will lead to an assurance of continuous patronage.
To make good use of this strategy, you should constantly send exclusive offers to your customers. The idea is to increase customer engagement or interest in your product or service and make them want to come back for more.
You should also consider the type of subscription model best suited to your customers and ensure it includes products or services with continuous availability.
Go Out of Your Way to Thank Customers
Going further out of your way to say "thank you" to customers will strengthen relationships and customer loyalty. You don't need to give them the VIP treatment to show appreciation. A personalized, handwritten thank-you note can be an effective and inexpensive approach to keeping customers.
In making them feel appreciated and important, your customer lifetime value (CLV) — which is one of the key customer success metrics — increases, and churn rate decreases. In addition, happy customers can become brand ambassadors, thus helping you reach a broader audience.
Create Rewarding Loyalty Programs
By showing customers you see and appreciate their loyalty it encourages them to patronize you more. Creating a rewarding customer loyalty program is one way you can increase how customers patronize your brand. For instance, customers will be excited to come back and purchase from you when they know they stand a chance to get something.
You can also do this by having a referral program where customers get something when referring your brand to others. This can come as a discount for their next purchase or offering some other benefit. This way, you not only keep existing customers but also streamline customer acquisition.
Keep Your Small Business Finances On Track With Skynova
Although customer acquisition and retention are key to the profitability and sustainability of any small business, your ability to manage and keep your small business finances on track will, in the long run, determine if your business succeeds or folds up.
Skynova's accounting software forestalls potential business losses caused by financial mismanagement. With Skynova's accounting software, you can efficiently manage your income, account for expenses, and maintain an accurate financial record.
Our software solution can record your transactions automatically, allow you to create invoices, and present an accurate view of your company's financial health. While you focus on customer retention, let Skynova focus on your bookkeeping.
Notice to the Reader
The content in this article should be viewed as suggested customer retention strategies for small businesses and may not apply to your specific situation. You should always seek expert opinions, especially to broaden your perspective on these strategies.