Loyal repeat customers are the lifeblood of a successful small business – research shows that the probability of selling to an existing customer is 60-70%, while the probability of selling to a new customer can be as low as 5-20%– but establishing deep relationships is hard work. Creating rapport with one customer (let alone one hundred!) requires hard work, a little luck and holistic strategies to address churn. A lucky few benefit from customers that “return organically” by virtue of convenience, location or price. But the rest of us will have to work at it, so let’s talk techniques! Here are my top seven:
Technique #1: Maximize Your First Impression
We only get one chance to make a first impression – we all know this adage because we all know it’s true. Impressions lead to opinions and then to behaviors, so making the most of your “first touch” should be job #1. In our hopelessly digital world, those impressions are gathered online and cemented in the blink of an eye. Whether it’s your website, LinkedIn, Facebook, TikTok or Twitter… you must ensure that prospects come away with a favorable impression of your authentic brand. Even if their first interaction doesn’t result in a sale, these touches are critical to building lasting loyalty.
And don’t forget rating hubs on sites like Yelp!, TripAdvisor, Google or Amazon – update your profiles, respond to comments and keep it positive and professional.
Technique #2: Get Personal and Look to the Long Term
Savvy sellers know no single purchase is a “one and done” experience – you don’t sell someone a car, you sell them five cars over twenty years. Driving repeat business is dependent upon understanding your prospective customer, as best you can. This allows you to personalize every approach, based on purchase history, location or other meaningful attribute. Personalized customer communications are key – 77% of consumers say they favor brands that ask for and accept customer feedback, so ask for it!
Crafting effective follow-up communications like surveys, review solicitations, account check-ins, refer-a-friend offers… should be as tailored to that customer profile as you can make them. Think of terms of a “customer lifecycle” – what value can you offer your customers one month, one quarter or one year after their purchase. Define your touch points and determine outreach and engagement tactics that will work for you and your clients.
Technique #3: (Over)Deliver on Your Promises
Customer satisfaction is what we’re really talking about here, and that means a lot more than the sale. DYK that 50% of Americans have canceled a purchase because of bad service? Customers return to businesses where their expectations are met (ideally, exceeded!). If you can do it, “underpromise and overdeliver” is a proven technique to delight, not just satisfy, customers. Consider every touchpoint and ask yourself – what more could I do here? Small things can make a big difference, so look for opportunities to delight. What if we included a small accessory, a battery, a better package? What if we carried your car, offered to gift wrap it, and dropship it to your family? What if we included a free checkup?
Use gamification or simple scorekeeping to get your service delivery team engaged and committed because they will make all the difference. In fact, research has found that 86% of customers say an emotional connection with a customer service agent would make them continue to do business with the company. No one is perfect, so it’s critical that processes are in place to make managing/responding to/escalating customer complaints smooth and repeatable.
Technique #4: Slay It, Don’t Spray It.
Avoid the temptation to send out “email blasts” – to spray the same message to everyone, or to send emails too frequently. Authentic relationships are built on personalized approaches. This requires making an effort to understand each of your customers, and grouping them logically. This is sometimes called customer profiling – determine attributes or behaviors your customers share that give them some similarity (frequent, discount-motivated, volume purchaser).
Marketing automation software can help segment customers into relevant categories based on demographics, purchase history… and ensure they receive communications that are targeted and feel more relevant. Profiling your customer base (and automating communication sequences for each profile) enables businesses to scale their communication while making it more efficient. It’s also important to determine (and automate) your follow-up schedule of offers, emails, and phone calls to ensure consistent engagement.
Technique #5: Vary Your Outreach
In our digital world, there is no shortage of ways to communicate with customers, and businesses can find a lot of value in shaking up outreach. There is evidence that engaged customers want to hear from businesses, too. In fact this study found that 95% of loyalty program members want to engage with their brand’s program through new and emerging technologies. If you primarily rely on email to communicate with customers, you need to consider different ways of reaching out.
Can you enhance your in-store experience with product demos, free samples, informational kiosks or mobile checkout to expedite the purchase process? In eCommerce environments, go analog with a post-purchase thank you card (with a discount code) for future purchases or drop “something extra” into high value shipments. Consider every possibility, monitor your interactions with other vendors for ideas on how to continually delight customers and above all, personalize that communication. Your goal is not “just to” drive awareness and sales, but primarily to create and foster engaging customer relationships that leaves people anticipating their next visit.
Technique #6: Consider Flexible Payment Models
Depending on your business model, you should seek to offer as many customized payment plans as you can. You should not expose yourself to excessive risk, but perhaps offering a discount on a monthly subscription if paid annually may not only entice customers as a result of the discount, but enhance retention, as the likelihood a customer will leave is reduced (at least for those 12 months).
The recent rise in BNPL (buy now, pay later) arrangements – where a third party underwrites – a loan for the purchase and assumes the risk of non-payment in exchange for a fee is evidence that flexibility is increasingly important to consumers, and becoming a market expectation in certain sectors. While some companies may not want to finance customer purchases, installment plans can help certain types of businesses maintain steady cash flow.
Local farms and community supported agriculture groups (CSA) have long sold “box subscriptions”, which are regular offerings of local produce that customers pay for up front each season. By enticing customers to pay at the beginning of the season, farmers are able to maximize income at the end of the expensive growing season, while customers enjoy the first pick of the crop and a wide variety of nutritious food.
Technique #7: Unabashedly Celebrate Loyalty!
Loyalty programs are a tried-and-true strategy that can be a big help in retaining customers – one study showed that 62% of consumers could be persuaded to choose one brand over another due to the presence of a loyalty program. But lip service won’t do – a rewards program needs concrete perks and does more than just show appreciation – it must deliver benefits that give engaged customers real incentive to engage further.
To be successful, loyalty programs should be easy, cost-effective to administer, and convenient to use. Don’t make customers jump through hoops to reap rewards. They shouldn’t have to call a special number to redeem points, or find and track complex redemption codes. If offering a “buy 9, get the 10th free” online, populate the cart automatically with the discount if you can. In addition to convenience, businesses should make sure their loyalty program reflects the customer’s interests and purchase history. What’s more annoying than gettin a discount offer on something you just bought? Consider all potential perks (early access, deeper volume discounts, trunk shows, discussion forums, 1:1 meetings) to really bring your program to life.
In an increasingly competitive small business environment, SMBs need to do everything they can to establish as many meaningful customer relationships as they can. Savvy business owners will utilize time-tested strategies like personalized communication and rewards programs, in addition to affordable marketing technology to earn customer loyalty. Loyal customers have always been the beating heart of a successful small business. Employing some heartfelt outreach or your own can serve to show customers how much their patronage is appreciated and forge lasting bonds with your clients.