Most small businesses spend more energy and expense trying to enlist new customers than they do trying to retain those who have already chosen to do business with them. Depending on what industry you are in, research indicates that acquiring a new customer is anywhere from 5% to 25% more costly than keeping an existing one.
But how does a business grow by focusing on retaining the same customers? The answer is by focusing on growing their goods and services for their existing customers. Let’s take a look at Apple. In 1976, when they first introduced their computer technology, they targeted the graphic art industry. Around the world, graphic artists would only own a “Mac”. Next came the Apple printer, the Apple Powerbook, the IBook, the IMac and within 25 years there were ten generations of the IPod. At 32 years they introduced the IPhone and then the IPad.
Granted, those original graphic artists haven’t been the only customer base for this zillion dollar company, but most of those original customers are still buying that brand exclusively. From the very beginning Apple kept a record of every customer who bought their product, and continued to give them the customer support they needed to win their loyalty. Once they secured that allegiance, they then had a base to sell each new product and service, year after year. That has led to generation after generation.
As a small business owner in our mountainside community, securing loyalty is just as important to your growth as it has been to Apple. Every customer that does business with you, or even inquiries about your goods and services, should become part of your business family. You should secure their email address and any other contact information they will share. If you can’t get their birthday, then note the date they first did business with you and email them a Happy Anniversary card, for they joined your business family 1 year ago, 5 years ago and before you know it, 25 years ago.
Though some industries have found loyalty programs (buy 5 cups of coffee and get your next beverage purchase free) to be quite beneficial in customer retainage, most small businesses can secure that same loyalty by treating their customers like family. Keep in touch. Share good news. Let them always know how much you appreciate their business. Always thank them profusely when you know that they have referred business your way. Reach out to them if you know they are at a crossroad in their lives, such as sickness or other devastating challenge.
Keeping this database also gives you the opportunity to track your churn rate, or those customers that no longer do business with you. By understanding who has left the fold and why, you’ll be better able to serve your loyal customers and your new clients. You will begin to understand the roadblocks of your business and you can begin to unlock the value of your product to more customers.
Your client database is where you first introduce new goods and services. How does a small business grow their goods and services like Apple? By listening to the needs of your satisfied customers as well as understanding why some customers have left you, you’ll be able to identify how best to grow and develop. If you clean carpets, but you are asked often if you can clean and repair leather furniture, you now have a direction to grow. If you install white picket fences, but find that your past customers’ only dissatisfaction is that they can’t find someone to pressure wash, paint and repair them, there’s an additional service on the horizon. If you serve a mean grilled cheese sandwich, and your servers tell you that they often get asked if you serve tomato soup or chili with that sandwich, it’s time to consider adding these to your menu.
And remember to always let the Chamber know of your growth, as well. We want to share your evolution with the community.