One of the most common mistakes many small businesses make is that they spend a lot of energy trying to get “new” customers; while ignoring retention efforts to keep their “existing” customers coming back.
In other words, they allocate most of their budget to getting new customers to come through the doors, but hardly invest any of their marketing dollars on keeping their existing customers spending money with them.
A successful business is not about who gains the most new customers; it’s about who gains the most PROFITS in the end. A true “loyal” customer is cultivated over time; not one who makes a couple of purchases and they’re gone.
Business owners who only focus on attracting new customers usually find out the hard way that many of their customers won’t stick around for the long-haul.
Therefore, instead of looking for a million of ways to attract “new” customers, companies must put more attention towards their existing customers.
What is customer retention?
Simply put, this is the act of applying effective strategies and techniques that prompt your existing customers to use your company whenever they are in need of your type of products or services in the future; turning them into long-term, loyal customers.
Of course, customer loyalty heavily depends on how good (or bad) your products are – as well as how good (or bad) your customer service is. However, without solid processes that actively keep your existing customers coming back, even the best products and best customer service won’t keep your business afloat alone.
Some companies already understand that REPEAT business should be one of their top goals; so they are aggressively implementing powerful customer loyalty and retention strategies.
What does this mean for your business?
Well, if you are not on the same track, you could be losing some of your customers to your competition. Not only that, but those competitors are probably using customer retention tactics that will make your customers STAY with them.
A loyal customer can be further described as:
- Someone who makes regular purchases from you
- Someone who purchases multiple products and services from you
- Someone who refers others to your company
- Someone who ignores the competition
Loyal customers are hard to come by; so HOW do you make it happen?
Ways You Can Build Customer Loyalty and Retention
You may be wondering “how” your company can build stronger customer loyalty.
We are going to quickly review some procedures you can implement into your marketing mix that will help keep your existing customers coming back to do business with you.
Not only that, but you will learn some ways to “keep” them in a long-lasting relationship with you – ultimately leading to a boost in your bottom line.
Every business should make a serious effort to devote adequate time and apply the appropriate budget to the area of “customer loyalty” if they want the best ROI.
Don’t know where to start?
You’ve probably noticed that many businesses are using the paper punch card type incentive and rewards programs. While this is better than doing “nothing” in regards to building customer retention, there are many other avenues that will help keep your customers around.
Digital technology – such as mobile phones and computers – makes building customer loyalty easier than ever before. Not only that, but these methods make it easier for companies to actually track data associated with those strategies.
Here are 20 processes and practices that can help you keep in touch, build relationships and get more repeat sales:
This is one of the most popular forms of marketing today and is a very good way to stay in touch with your local customers. Most internet users use email, so this is a simple way to remain connected with consumers.
Building a relationship with your customers via email allows you to keep them up to date on your company, your products, and your services.
Most businesses these days have already come up with an email database of their customers. However, many of them are not doing anything with those email addresses – so they’re just sitting on their hard drive or in an old notebook collecting dust.
With email marketing, you’ll be able to reach people in the comfort of their own home – or wherever they may be in the world. In other words, you can keep your business in the forefront of their minds when they need your type of product or service.
Email is a great tool for relationship-building with your customers because you have the ability to personalize your communication – creating trust and credibility.
Your responses will be delivered instantly and the emails are traceable so it’s easy to track how well your campaigns are working for you.
It has been proven that sending out email coupons can boost the results of a good sale. Consumers simply love getting “deals.” So your customers would be more than happy to receive a coupon discount from you in their email inbox from time to time.
Offering coupons and other special discount offers will help your consumers pay less attention to your competition and more attention to you.
Here are some best practices that you can take away about email coupon marketing:
- Test the amount of the coupon in order to trace which one gives a higher return compared to others.
- Study your target market and make sure that you’re only sending the right offers to the right consumers.
- Do not bombard your email subscribers with message after message. Break it up by providing some helpful content without trying to sell your products or services.
- Set an expiration date on the coupons to create a sense of urgency.
- Include social media ‘share this’ link in your emails so you’ll be able to reach more local consumers without any additional effort.
Text Message Marketing
Just like email, text message marketing is a very effective way of driving more loyal customers and generating more sales. As a matter of fact, it could help you reach your target audience even faster.
Millions of mobile consumers keep their mobile phones within arm’s reach at all times; meaning most of them will see your message within minutes of you sending it… What other form of marketing can claim that?
Happy customers are likely to respond right away when they receive your special text message offers. Instead of waiting for your audience to reach out to you, text message marketing allows you to be proactive just by sending a quick text message.
However, just be careful to mix in some good, value-added content from time to time instead of hitting them with offers every single day.
Once your text message subscribers send a text message to your mobile short code, they will automatically be added to your mobile subscriber list – which means they are opting-in to receive future messages and offers from you.
Here are some benefits of text marketing:
- Fast delivery. Seconds after sending your text message, your customers will open and read it – will be real-time.
- Reliability. Compared to email marketing where you have to fight against spam and other filters, there are no barriers with text messaging. You will then be assured that your message will be received and read right away from the targeted market.
- Unlimited market-reach. Text messaging is the fastest way to communicate with people… and it’s the same thing when marketing a business. Can you imagine the number of people you’ll be able to reach with just the click of a mouse?
- Direct to the point. E-mails are pretty long compared to text messages, which means text messages take a lot less time to prepare.
With a limited number of text message characters, businesses are forced to omit irrelevant information and go directly to the whole point of sending the text message.
As far as the experts in marketing are concerned, mobile coupon marketing is the next big thing to hit the advertising world.
For consumers, keeping up with paper coupons is getting harder and harder. Everyone is busy these days; so remembering to bring along coupons is usually the last thing on our minds.
However, consumers have embraced mobile coupon marketing due to the convenience of carrying the coupon with them at all times – right on their mobile devices.
Your customers use their mobile phones all the time which means that your mobile coupons will likely be opened and read right away.
This is powerful for creating repeat sales as you will stay in the forefront of your customers’ minds when they need your type of product or service.
Quick Response (QR) codes are a great way to deliver mobile coupons; better yet, it’s a great way to build a list of mobile subscribers. The way these 2D bar codes work is that once a mobile user scans the code with their mobile phone camera, they will be taken to your destination of choice.
So if you tell mobile users to scan your QR codes with their mobile device, be sure to give them something useful and exciting in order to get them to scan it.
Once they do, you now have them on your mobile subscriber list – meaning they will receive future offers and messages from you right on their mobile devices.
Creating a mobile app for your local business is one of the most effective ways to build a solid connection with your customers.
Instead of going online through the web to access your company information, they will have your mobile app right on their phone for easy, convenient access – without the need to connect to the internet.
A mobile app allows your consumers to be in touch with your company at all times, as well as allows you to reach out to your customer-base with one push of a button.
Mobile apps are quickly gaining popularity in the world of digital marketing… You’ve probably heard the phrase “Oh, yes there’s an app for that.”
That’s because mobile apps have taken off as one of the fastest-growing forms of technology to ever hit the marketing sector.
Having your very own mobile application can be instrumental in helping your business reach multiple levels of repeat business that would have otherwise gone unachievable.
Let’s say one of your happy customers is out and about and decide that they want or need your product or service…
So they whip out their cell phone to get your phone number… but when they land on your company website, the website does not load. And if it does, they have scroll like crazy just to find what they need.
Not only will this be a frustrating experience for your mobile customers, but it’s one that could impact your ability to generate more sales from them.
Nothing can get our blood boiling like the inability to access a company website on our mobile devices – especially when we’re in need.
So if you really want to send your customers running to your competition, don’t bother to make your website mobile-friendly.
This is a surefire way to create some unhappy customers, which could jeopardize your ability to win their attention in the future.
Besides… the world is mobile… your customers are mobile… isn’t it about time for YOU to become mobile? Your customers expect this of companies they do business with.
Social Media Marketing
With more than one billion people using social media to connect with friends, family, and businesses, it is safe to assume that social media is here to stay and will not be going away anytime soon.
Who doesn’t use social media these days?
Only a handful of people and if you really think about it, millions of people all around the world can be reached quickly and easily through the various social media networks.
This is great news for companies around the world because social media has opened the doors to create real-time consumer to business interaction online. This is a huge opportunity for small businesses to connect with their local customers and keep them engaged.
Socialization is perfect for building strong relationships with your customers as you watch them continue to do business with you – as well as refer your business to others within their networks.
You can market your products or services on the most popular social media sites such as Twitter, Facebook, LinkedIn, Google+, YouTube, etc. Your customers will be able to leave feedback or questions about your products and services right on your pages; giving your brand a chance to shine by publicly responding and providing excellent service.
Responding to customer concerns – and even customer praises – shows that your company really cares about your customers. Showing that you place value on your customers’ happiness will ultimately lead to repeat sales and a higher level of customer retention over time..
Monitoring and Responding to Customer Reviews
Have you ever read a product review on something you were considering purchasing? If you can recall that specific review, how did it affect the way you felt about the product after reading the whole thing?
A positive review probably had you set on buying it, right?
A bad review probably had you running the other way…
This is exactly how your customers will feel when they come across negative information about your company online. Just because they may have had nothing but good experiences with your company in the past does not mean that they will ALWAYS hold that image to heart.
Consumers today fully trust what other consumers have to say about a product, service, or business online – whether it’s true or not. This means if your “satisfied” customers come across negative comments regarding your company, chances are that your image can be tarnished with them – making them seek out other alternatives… a.k.a – your competition.
Want to really put your customer loyalty on speed level? Ask your happy customers to leave reviews for you on the various online review sites such as Google+ Local, Yelp, YellowPages, etc.
Happy customers will likely leave a positive review but do not offer an incentive for doing so because that is considering “bribing,” which could backfire.
So you know the best way to accomplish this? Just provide great products and services and they will be happy to leave a good review for you! It’s as simple as that.
Over time, you will see the level of online reviews get better and better for your business as long as you continue to offer quality products and services. This, in turn, will keep your existing customers coming back for more – as well as attract new customers.
Online Reputation Management & Branding
To build upon customer reviews, which we talked about in the last section, an overall good business reputation is something that your existing customers expect from you.
The last thing you want to happen is for your loyal customers to move over to one of your competitors because of a bad online reputation.
Can you afford to see them go elsewhere – taking a risk that they’ll never come back? The most important thing to remember here is to be extra careful about what content is published about your company online.
How are you marketing your brand on the internet? Are you flooding the web with good, helpful content in regards to your industry? Are you keeping your personal opinions off of your business pages? Are you even paying attention to your online reputation at all?
Not only do you need to monitor and respond to things that are being said about your brand online; but you also need to continuously build brand awareness using various methods to help your customers remember YOU when it matters most.
Remember, your happy customers can still leave you in just a blink of an eye; but don’t let it be because of your online reputation, which can be monitored, managed, and controlled.
Providing a Quality Product or Service
To be honest, it does not matter how good your marketing strategies are if your product or service is lacking. In other words, your customers don’t expect your products and services to ever lose their excellence – in fact; they expect them to get better and better.
This does not mean that you should simply drop the price of your product or service. Many consumers today associate “cost” with “quality;” so if your cost is too far below your competitors’, a red flag could be raised with your customers as they start to question how good your product or service really is compared to your competition.
Instead, put all of your efforts into making your products and services as top-quality as they can be; as long as you can accomplish that goal, most of your happy customers couldn’t care less about paying a higher price for it.
Excellent Customer Service
If you don’t invest in providing an excellent customer service experience for your customers, chances are they won’t be coming back for long. No one can deny that your level of customer service can boost or kill your reputation – seriously impacting your ability to get both new and repeat business.
There’s no question about this. Every business knows the importance of customer service and it’s not as simple as it sounds. Each customer will have different needs and demands which can be difficult to fulfill at times.
However, as a business that thrives off of satisfied customers, you have no choice but continue to make them happy if you want that long-term connection with them.
Proactively address customer concerns and complaints in order to put them at ease so they will continue to trust your company.
When your customers feel valued, respected, and appreciated, their loyalty soars – and so does your profits.
Keep it Personal
Studies have shown that personalization in just about any marketing technique can really boost effectiveness. This is because people naturally like to feel “special.”
Keeping your marketing messages personal is not as hard as you may think it is. It’s as simple as adding a special personal touch to your emails, text messages, social media responses – such as addressing them by their first name and speaking directly to them as one person (where applicable).
This will make your customers create an even more personal bond with your business, resulting in an even longer connection.
If you go too long without communicating with your customers, your “relationship” with them will fade away. It’s almost like a real-life relationship… Unless you nurture it and be attentive, you will be left to wonder how it dwindled away.
Therefore, be sure to schedule in special maintenance check-in messages even when there are periods of time where you do not have a special offer to make. This is a good time to provide your customers with valuable info or even ask them for feedback on your product or service.
You can also take a step further by sending out thank you cards to your customers or even making a phone call just to say “thank you.” You will be surprised how far this will go in terms of creating long-lasting relationships with them.
Make Sure Your Employees are Happy
Nothing turns off a customer more than a negative, grumpy employee. No matter how good your product or service is, an employee can quickly ruin it for some of your customers.
Unfortunately, consumers’ purchasing habits often correlate with the demeanor and behavior of employees… For instance, if an employee is disrespectful to a customer, that customer will probably not purchase from you.
If an employee is great and goes out of their way to help a customer, the customer is highly likely to purchase from you.
Therefore, it is critical that your employees always come across friendly, helpful, and positive – especially front-line associates who have direct contact with your customers.
Otherwise, you risk losing customers due to something that could have been avoided with the proper guidelines in place. Employee customer service training is a great place to start to derail any potential pitfalls.
Make sure they fully understand that how they treat your customers has a direct impact on customer retention – and ultimately, their job security.
Maintain a Clean and Comfortable Environment
If your business is one that has customer foot-traffic, you have no choice but to make sure it is clean and comfortable if you want them to continue to come in.
When most consumers are looking to spend their money with companies, they’re only willing to do it with ones that have high standards of cleanliness, sanitation, and comfort.
For instance, a restaurant that keeps dirty tables and messy counters can instantly turn off customers. No one wants to eat in a unsanitary environment no matter how good the food tastes.
Segment and Target Your Marketing Efforts
Concentrating on the specific needs of your customers can help you create products and services to take care of those needs – in other words, it allows you to target your marketing efforts in certain areas.
Instead of trying to please everyone with everything, focus on pleasing smaller centralized groups with special products and services to meet their individual needs.
How do you target your efforts?
You can start by asking your customers what they want and need. Then, analyze the overall responses along with your product offerings to see how you can easily accommodate them.
Study your competitors to see what they’re doing in terms of targeted marketing. Don’t be too quick to copy them because they could be going about it all wrong. But it is a good idea to at least know what they’re doing so you can do it even better.
Based on your findings, satisfy your market by creating these specific targeted products and services. Be sure to analyze your campaigns and test your strategies before you move full force ahead.
If you’re successful with targeting, you can truly realize a stream of long-term customers that won’t leave you as long as you’re providing what they need.
Ask Your Customers What They Want
Customer surveys are powerful when it comes to keeping your customers flocking to your company. By taking the time to find out what they’re looking for, what they think you can improve upon, etc., you give your customers comfort in knowing that you really care about what they think.
Because of that, they will continue to do business with you in anticipation that you will get better and better at giving them what they want and need.
Under-Promise and Over-Deliver Every Time
Want to really see your customers giving you kudos? Simply give more than you promise. In just about any type of business, this strategy will help you keep your customers around for a long time.
Value-added items, such as occasional freebies or great discounts will show your customers that you really do care about providing them with value.
Another powerful method is to give them something really simple – such as free tips in regards to your type of product or service. For instance, a dentist can offer their patients dental care tips via email, text messaging, direct mail, or other methods. Their patients will appreciate this and keep them in mind the next time they need a filling.
Customer Loyalty and Rewards Programs
The implementation of a customer loyalty and rewards program has worked wonders for many companies across the world. Getting your customers into your rewards program funnel is one of the most powerful ways to keep them buying from you over and over again.
Loyalty and rewards programs make your customers feel “special” because they are part of your “discount and coupons” club, which means they get first notifications of any special offers you may have.
Let’s take a closer look at loyalty and rewards programs…
The Importance of Customer Loyalty and Rewards Programs
The sole purpose of a customer rewards program is to keep our competition at bay by motivating your happy customers to continue to do business with you.
Implementing strategies to retain your existing customers is much more affordable than aggressively prospecting for new customers. So any money spent on loyalty and rewards programs will lead to customer retention and repeat sales, which is always worth it.
What Exactly Is a Customer Rewards Program?
A customer rewards program is a marketing strategy that is adapted by companies with the purpose of creating repeat, loyal customers.
Many business industries only see an increase in sales during special events or peak seasons; that’s unless they have a customer loyalty and rewards program, which is designed to help them see an increase in sales consistently.
Once you implement your loyalty program, encourage every single customer – and potential customer – to join for the best results.
Using email or text messages, you can be in direct contact with your local customers, resulting in repeat sales and higher profits.
Why Use a Customer Rewards Program?
A customer reward program is a great way of keeping your customers loyal, excited, and happy about their relationship with you. While your customers will see bigger savings just for being a member of your loyalty program, your business will see some benefits as well:
- Repeat business. Your loyalty club members will receive a lot of perks just for being a member… so they’re excited about coming back for more.
Due to the fact that they are enrolled in your loyalty program naturally encourages more spending. Every time they spend, they get rewards – and you get more money. So it’s a win-win for everyone involved!
- More Profits. Your customers are likely to get hooked on your rewards program, which is great. The longer they stay, the more money you will make in the long run. Does it look like Monday night is your slowest night for the past several months? Shoot out a text message to your program members and let them know about an awesome special offer you have just for club members on Monday nights. That won’t cost you much, but it sure could add a few extra hundreds of dollars to your bank account.
- Instant Contact with Club Members. Whenever you get an idea about an offer to send to your loyalty club members, there’s no waiting. You can send it out instantly and many of them will see it within minutes.
What are the Different Types of Rewards Programs & Incentives?
- Buy One, Get One Free
- Buy One, Get One Half-Off
- Bring a Friend Deals
- Dollar Amount or Percentage Off if Spend a Certain Dollar Amount
- Dollar Amount or Percentage Off of Total Purchase
- Birthday Discounts and Freebies
- Free Product or Service After a Certain Number of Purchases
- Earn “Points” for Every Purchase
- And many others…
Deciding which type of rewards program and incentives are best for your company takes come research; it’s different for every company and heavily depends on the type of products and services you offer.
Just choose the structures that make the most sense for your customers; be sure to test out different strategies to see which ones work the best for you.
Tips for Starting a Successful Rewards Program
- Plan it Out – before you start anything, develop a detailed plan that outlines how you will go about your customer loyalty rewards program. How will your points system be structured? What are your rewards? If the system does not work, what is your exit strategy? Answer all of these questions and more when planning out your rewards program for the best results.
- Ask Your Customers What They Want – this can be done by sending a quick email or text message… or even simply asking your customers who come into your establishment. Take their feedback and create programs that will make them flock to your business for the long-haul.
- Make it Easy for People to Sign up – keep it simple. You can have them opt-in to your mobile or email list… or you can have them fill out a short form in your store… or on your Facebook page… the possibilities are endless. Just keep the sign up form short and appealing.
- Tailor Incentives for Specific Customers – segment your customers by certain attributes that make sense. Then, create incentives to cater to each group.
- Make Sure Your Rewards are Valuable – make it worth your customers’ time to participate in your rewards program. Your offers must fill a specific need your customers face – in a very big way.
- Initiate the Program. Let all employees know the details of the program so that they can explain how it works to your customers. Also, make all customers aware of your new loyalty program by informing them through website updates, emails, in-store posts, text message and many other means of communication
- Ask EVERYONE to Join Your Rewards Program
When implementing a customer loyalty and rewards program, your main goal will be to invite as many people as possible to join. If not, it could end up being a waste of time.
It’s as simple as asking all of your customers, “Would you like to join our rewards program and receive discounts on future purchases?”
Not asking people to join is like letting money slip through your fingertips because once they join, you will have a direct marketing connection to them.
Take advantage of all means of communication, such as:
- Ask customers who visit your establishment
- Ask your Social media followers
- Post in-store signs
- Send an e-mail to your list
- Send a text message to your list
- Post it on your website or blog
- Put it on your flyers and direct mail
- Don’t give up. There may be a point, especially during the first few days or weeks, when you feel like the strategy is not working but be consistent all the time and don’t give up. Over time, you should begin to see the fruits of your labor as you start to generate more repeat sales without having to spend a ton on advertising.
The main reason customer reward programs work so well is because everyone stands to get something great out of the customer-business relationship – your business and your customers.
Many people are willing to go the extra mile just to get the special discounts and rewards in the future. If correctly implemented, a loyalty program could completely change the fate of a struggling business.
What are you doing to keep your customers coming back for repeat sales? If you have not implemented any marketing strategies or processes that promote customer loyalty and retention, it’s about time you seriously take a look at it.
It’s easy for customers to go checking out the competition, so be serious and consistent about your customer retention efforts for the best results.
Delivering quality builds trust. Delivering value builds credibility. The combination is the most powerful tool you can have in your company to keep your customers loyal for life.
Over time, your company will realize increased sales, profits, and ROI… which is exactly why keeping your customers satisfied, engaged, and informed is no longer an option… it’s a MUST.
Not only will they continue to choose your company, but they will also send even more potential repeat buyers your way.
I help local businesses in the area implement various online marketing strategies that help them build loyalty and retention. Chances are you’ve probably wondered how you can stay connected to your current customers and I have several ideas to help you do so.
Contact us if you want more information on how to start a rewards/loyalty program.
Edward Kundahl, Ph.D., M.B.A.
Ed can be reached at (or visit his websites)