Mark and Sharon Spero, owners of Money Mailer of Fox River Valley, recently shared their insights into key customer retention strategies. The following article was written by Katherine Paljug, contributing writer at Business News Daily.
Losing customers costs businesses billions of dollars per year. But many small businesses are so focused on bringing in new customers that they forget about the ones they already have.
Sharon and Mark Spero, the owners of a Money Mailer franchise near Chicago, work directly with local businesses to both target new customers and keep the existing ones loyal. After 20 years in business, the Speros aren’t just direct mail experts. They’ve also seen firsthand how key customer retention is for a thriving small business. Here, they share their best tips for improving small business customer retention.
1. Sell to old customers, not just new ones
When planning out your marketing strategies, from direct advertising to search engine optimization, it’s natural to think about how to attract new customers. But put some of that effort into your old customers, too.
“Old and current customers know us well,” the Speros explain. “Current customers will often work with us on larger projects more than new customers. Why? New customers are testing the waters and will limit their spend.”
Creating a sales and marketing funnel specifically for existing customers is not only key to growing your business, it’s often a better investment of your time and resources. According to Forrester Research, it costs five times as much to acquire a new customer as it does to retain an existing customer. How do you want to spend your time and money? A focus on old and current customers will create more return on a smaller investment.
2. Understand their expectations
Customer retention depends on customer satisfaction. But many times that satisfaction depends less on the goods or services you provide than it does on expectations. If a customer wants only a one-hour consultation to double their revenue overnight, they’ll be disappointed.
“One of the most common mistakes business owners make is to avoid the conversation about expectations,” the Speros pointed out. “These expectations can often be unrealistic and unmeasured. Most importantly, they need to align with the communication goals.”
As a business owner, it’s your responsibility to initiate that difficult conversation. Customers should have a realistic picture of what they are buying. This includes the cost of their purchase, expected results, and any return or refund policy you may have in place.
When all is understood and expected from the beginning, customers are much more likely to be satisfied at the end.
3. Offer to improve
If for any reason a customer isn’t satisfied with their experience, the best thing you can do is take responsibility and offer to improve. No matter where the mistake or miscommunication occurred, customers expect you to make the situation right. Why? Here’s a golden opportunity to turn even a disastrous situation into a loyal customer.
“If a client … wants to cancel, we push back and dive in to why,” the Speros said. Once they understand why a client is unsatisfied, they offer solutions and improvements that often convince hesitant customers to stick around.
When you make the customer part of that process, loyalty increases even in satisfied customers.
In their business, the Speros meet with clients to see where they can make customers even happier. “We have an annual review in person with each client. In these meetings, we listen, evaluate, re-examine and refine their advertising strategy based on changes in the client’s business.” Who doesn’t like some personal attention these days! With this strategy, you not only make clients feel valued and respected, you can anticipate and avoid future problems.
If you don’t interact one-on-one with clients, you can still offer improvements. An email survey, either sent to everyone at certain points in the year or to each customer after a purchase, gives customers the opportunity to offer feedback. Additionally, you have the opportunity to make changes.
Once you’ve made those changes, don’t keep quiet! Let customers know exactly what you’ve done and how that will improve their experience. When they know you take their feedback seriously, you increase their loyalty and customer retention.
4. Communicate and connect
Regular, personal communication create personal connections that convince customers to stay loyal to a small business.
Newsletters and regular e-blasts are great ways to keep them informed of changes, developments and special offers. If you are a local business with local customers, the Speros recommend getting involved in the community. What better way to create strong, personal relationships with them! “We frequent our client’s business whenever possible, see them at chamber of commerce functions and local charity events. Remember to chat not just about business, but about them.”
If you are working at a distance, it’s still possible to create a feeling of personal connection. “Even if there is not time to meet with a customer in person, a call is important,” the Speros advise. “It doesn’t have to be every month. However, conversations, rather than just emails, create an emotional engagement that tells the customer you’re important to us.”
If you can, send personal thank-you notes and other handwritten notes. Why? It reveals your loyalty and commitment to them. In the digital world, create real connections by responding directly to emails and comments on social media. Post content that shows the people behind the business. For new one-on-one connections, attend trade shows where you can talk to customers in person.
By communicating directly with customers, you encourage their engagement, which in turn makes them feel invested in your business, the Speros explain. “Through communication, a relationship is created, which often leads to a more loyal, long-lasting partnership.”