For business owners, the pot of gold at the end of the sales rainbow is repeat customers. Loyal customers who buy from you and only you are more important than virtually anything else your business has worked so hard to achieve. They not only boost sales, but lend immense credibility to your company and act as unpaid marketing agents by buoying your business with the best kind of advertising that money can’t buy: word of mouth.
As explained by David R. Kiger in his blog: “According to a 2011 study, 86 percent of consumers will abandon a business after experiencing poor customer service. A Bain & Company study showed that in financial services, a 5 percent increase in customer retention equals more than a 25 percent increase in profit.”
Follow this guide to identifying and keeping your most loyal customers.
The 80/20 Rule
It is a common cliche in business that 80 percent of your business comes from 20 percent of your customers. But many cliches become cliches for a reason – because they’re true. Repeat customers drive business.
Do you know how much your particular business adheres to this 80/20 quotient? Identifying exactly – or at least as close to exactly as possible – how many of your customers are loyal, repeat patrons is the key to keeping them. Depending on your industry, as well as the age, location, and size of your business, there’s no single formula to do this, but taking a customer loyalty IQ test is a great place to start.
Engaging your best customers through chat or social media is the easiest and most direct way to create a sense of family. Instead of spamming blindly to all of your followers, identify and target your loyal base and name them publicly on Twitter or Facebook. This gives you a chance to speak casually and thank them for their patronage – all while showing potential customers that you recognize and care about those who are loyal to you.
Give Back to the 20 Percent
Run exclusive promotions for your most loyal customers. Make them special deals, offers, or even host giveaways. Make them substantive, meaningful, and valuable. Even if you break even or take a slight loss, you accomplish two things. First, you recognize and reward them for their loyalty, which will make them customers for life. Second, you dangle a carrot in front of prospective customers by showing them what happens when they stick with you.
Give Good Gifts
Business merchandise is usually tacky or gimmicky. In reality, no one wants your keychain or coffee mug. But a thoughtful, personalized gift reinforces the family feel while displaying your human side. A book with a handwritten inscription, an inscribed fountain pen, or even a handwritten letter (a charming rarity these days) can make customers feel indebted to your business.
The golden rule of business is that the best customers are repeat customers. Identify your top customers, what they buy, and when they buy it, and then embark on a campaign to let them know the truth: that you couldn’t do it without them. Stay in touch, pay them back – and let the world know that your business takes care of its best buyers.
About the Author
Andrew Lisa is a freelance writer living in Los Angeles. He writes about small business management and profiles top business professionals.