CLARKSTON – Studies show that satisfied customers will tell at least two people about good products and services. Other research suggests it can cost up to five times as much to acquire or replace a customer as it does to retain one.
No matter what business you are in, acquiring and keeping customers is challenging in todays competitive climate. With so many similar products on the market and price no longer an advantage, how do you keep your customers coming back and do it cost-effectively?
Todays customers have so many choices it is imperative that businesses:
Understand what their customer/client is trying to achieve
Deliver what you promise, when you promise it
Look for ways to improve; if you make a mistake or something is not working, dont duck the problem find a new, better solution
Under promise and over deliver
Provide extra value
Communicate
Become a valued resource
Thank your customers
Advertising, sales promotion and publicity may get customers in the door. But with most companies operating on leaner budgets, increasing resources for advertising and promotions may not be an option. It is expensive to keep using resources to attract new customers. A less costly avenue to increased sales revenue is to persuade customers to return again and again, and have them recommend your products.
First things first how do you define your customer? Is it someone who makes a single purchase from you or is it someone who returns often to purchase your products or take advantage of your services? New, one-time purchasers do help lift sales and volume. Focusing on your current customers, however, will reap greater rewards.
The challenge then becomes how to capitalize on the customers you already have. Satisfied customers tend to be loyal to a brand or business. Using your resources to persuade current customers to make additional purchases or make return trips will build loyalty. Building customer loyalty will bring customers back time and again, generating consistent revenue. Loyal customers also create the opportunity to acquire new customers through word-of-mouth recommendations.
Earning customer loyalty begins with having the right product that matches your customers needs. Also intrinsic to customer loyalty is quality. Your product must not only measure up to the competition, but your offer must surpass them. Customer satisfaction with your product, your service and your follow up is also key to earning loyalty. Quality and satisfaction will increase purchases and repeat visits and generate recommendations of your product to potential new customers.
Rewarding loyalty is another tactic for keeping your customers coming back and purchasing more. Many companies today offer loyalty programs that reward frequent purchases or certain dollars-spent thresholds. For example, we are all familiar with frequent flier mile programs that reward air travelers. Many retailers offer similar programs to reward frequent shoppers. After reaching a threshold amount, the customer receives a certificate that can be used as cash toward their next purchase. Others offer private sales or invitation only events to learn about new products.
Dealer Concepts of Clarkston offers a similar loyalty program. Working with auto dealers nation wide, Dealer Concepts has developed the Punch-A-Dea key tag, which encourages loyalty among service customers by rewarding discounted oil changes and auto services at their dealership Dealer Concepts helps retain their customers for life.
Large customer research budgets are not necessary to develop a loyal customer base. Expand on what you already know. What promotions or programs have they responded to well in the past? What didnt they respond to? What new products can you develop to meet their specific needs? What can your customer service department tell you about what your customers are saying? The answers to these questions will inspire new ways to increase customer loyalty.
If you deliver on these elements, your customers will want to visit you more often and purchase more of your products. And, they will be more willing to recommend you to their colleagues, friends and neighbors. The results will soon be evident in your bottom line.
Andrew (Andy) Wolfe is managing partner and co-founder of Dealer Concepts, a company that provides innovative and timely customer retention and marketing products to a variety of car dealerships and after-market service centers throughout North America. Wolfe founded Dealer Concepts in 2000, along with fellow managing partner Gina Klokeid.
