Retaining your existing customer base is one key to the long term growth and success of your business.
Customer retention begins your thought process of having a business not only today but tomorrow, next month, next year, and even 10 years from now. It takes you from being upset at the customer who leaves with only one item that added only a dollar or two to the till. Instead, your perspective sees an ongoing customer who will buy from you over the next 5, 10 or 20 years.
You think of your customer’s long term value to your business. Doing so generates a completely different mindset of your customer base. The customer who purchases $10 a week is a $520 customer for the year and a $5200 customer in a 10-year period. When the long term is included, including what they buy and the respective profit generated, a relatively small customer becomes a big contributor to your success.
Plus one satisfied customer is likely to bring another and then another so that you continue to grow. If you remember the penny candy days, the candy itself made a small profit but it was a continuous profit. It also brought moms, dads, grandfathers and grandmothers into the store as well – not just to buy the candy but hopefully to shop and buy other things.
Here are some tips to help retain your customers:
- Mine your data. Who is coming in, what are they buying, and what does their purchase add to your bottom line?
- From the information, how can you help them find ways to do their work better, more effectively and, maybe, at a more affordable price? Getting a little less today may mean more over the long term.
- Find ways to surprise your loyal customers. It might be just listening. It might be a special program. It might be carrying a certain product. Everyone responds to something different. It takes time to determine these special items but is worth your time in long term success
- Build a foundation of trust. The old saying of “under-promise and over-deliver” will never fail.
- Put yourself in their shoes. Understand their pressures and opportunities. Today we find the American consumer patterns have slowed. As things get better, the consumer will remember those that listened and waited for the upswing.
A healthy business has returning customers. Set your goals, know how you are going to get to those goals, and be patient.
- About the Author
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Glenn Muske is an independent expert on rural small business, working as GM Consulting – Your partner in achieving small business success. He provides consulting, and writes articles for county extension agents and newspapers across North Dakota. Previously, he was the Rural and Agribusiness Enterprise Development Specialist at the North Dakota State University Extension Service – Center for Community Vitality.