Whether it’s a card with the business’s name on it or a promotion that rewards returning customers, many companies are beginning to incorporate incentives for customers to come back again and again. Almost half of all businesses use loyalty programs of some kind in order to lure customers back after that first purchase. There’s a reason that so many places are using this model: it’s profitable! There are several reasons why customer loyalty has become the best way to grow your business, even beyond attracting new customers.
- Identity – People identify with the places where they make purchases, and nothing can make that more definitive than a card with your logo on their keychain or in their wallet. Why would you go to Bill’s Market down the road when you’ve been happily going to Gary’s Grocery for a decade? New customers don’t have a personal connection to your store, but long-term customers will.
- Commitment – Some companies go so far as to offer discounts if a customer makes an initial commitment. For instance, both Sam’s Club and Costco offer discounts to customers if they sign up for a year-long membership. If you’re paying for a membership at one location, you’re not very likely to go anywhere else.
- Friendship – One of the most important parts of retaining customers is building an emotional connection with them. It’s so much easier to do that when the same people are coming back over and over again. Consistency helps build those connections that take you from being a flash-in-the-pan operation to an integral part of people’s’ lives.
- Purchasing Power – Long-term customers are more likely to make larger and more numerous purchases. By investing in them, you’re encouraging life-long buying trends that will only serve to improve your bottom line.
A Matter of Security and Stability
Do you want a business that’s going to last for a long time? Of course you do. No one builds a business from nothing just for it to burn out in a few months. Most business owners want some modicum of security and stability with regards to their income and expenses. The trouble is that business can be fickle. This year’s hot new business might be tomorrow’s forgotten novelty. One of the most important things that a business can do to ensure its security and stability is retaining customers. Customers that come back again and again can lead to a much more predictable bottom line. How do returning customers help?
- As a whole, they can be counted upon throughout the year. Very few customers will come back to a business on a specific day each month unless the individual has a subscription or regular account. However, when taking your customer base as a whole, returning customers can be counted on for a certain portion of your income.
- Some companies mistake growth for long-term success, and that’s not always true. Some companies will show an increase in customers because they’re offering ridiculous discounts and hot new offers, but as time passes, those deals can’t be sustained and customers begin to trickle away. Anyone can attract a customer once, but it takes real effort to keep one for life.
- Long-term customers can also become unofficial ambassadors for your business, talking it up in their social lives. These are the people who say, “Oh yeah, I’ve been going there for years. Talk to Steve when you get there. He’s great!”
It’s important not to take these customers for granted. Many companies who do find that they will jump ship to someone who cares about them. Be sure not to overlook this valuable resource in your income stream.
Looking into the “Second Layer” Experience
What does a customer want from your company? Of course, the most central thing is the product that you’re trying to sell. A business that tries to sell a faulty or weak product will soon find itself out of business. However, there are a lot of companies that sell good products, but they don’t always succeed. There’s more to a business than just the product. Everything that surrounds the primary purchase is often referred to as the “second layer” experience, everything that the customer experiences in connection to the purchase. These second layer experiences can have a tremendous impact on the customer’s emotional connection the product, so it’s important not to overlook them.
- Customer Service – One of the most important parts of the second layer experience is the way a customer is treated. Were their questions answered? Were they treated politely? Even a good product can be sullied by a rude salesperson or someone who lacks knowledge about the business.
- Ambiance – Is your website or physical storefront comfortable and welcoming? Sometimes people can be put off a restaurant if it’s too crowded or poorly lit. An otherwise helpful website might be taking a downturn because the links are confusing. These are important considerations because they are a part of the consumer’s experience.
- Follow Up – Part of keeping customers coming back for more is keeping an open dialogue with them. There may be other needs that your company can meet. Companies who make it a point to reach out to their consumers are the ones that are successful. Even if all you are doing is listening to their concerns or complaints, that demonstrates a willingness to improve and a genuine concern for your customer’s well-being. These things are extremely important in improving the customer’s overall experience.
Charming Your Customers to Keep them Coming Back
Customer acquisition has a certain appeal. Many businesses focus on obtaining new customers because there’s a certain thrill that comes with a new client. After all, what could be more exciting than introducing a new person to your product? However, if you can’t keep that new person around, he or she will quickly become a lost opportunity. Customer retention doesn’t mean that you stop trying to attract new business. It just means that you’re working to keep those customers that you do attract. To do that, it’s necessary to create a strong emotional bond between you and the client so that you are seen as both a business owner and a friend. There are a few strategies for doing this.
- Be honest about who you really are. Be honest about your strengths and weaknesses. No one likes feeling like they’re being sold to, but an honest conversation can be both refreshing and productive. How many people talk about going to the mechanic or doctor that they “trust”? Trust is earned through honesty and integrity, and that’s a bond that only you can create.
- Learn more about them. Your company might sell coffee, but that doesn’t mean you only have to ask about their coffee habits. Finding out about their personal lives, work experience, and even just their likes and dislikes might help develop a bond of trust.
- Empathize with the customer. Really try to see where he or she is coming from. The more you can put yourself in their shoes, the greater the likelihood that they will trust you with their business needs.
- Don’t be afraid of humor. A lighthearted approach can help break the ice in personal interactions. Do be careful to avoid crass or insulting humor, and don’t make jokes at the expense of your business or product. It’s a great tool but one that shouldn’t be wielded carelessly.
Don’t Be a Salesman
Why does Unitel’s approach to customer retention work? The key to our success is the way we define our goal. The best thing you can do is gain the customer’s trust and develop an emotional bond. For that reason, our consultants don’t see themselves as salesmen; rather, they are people forming a connection.
The Sales Approach
Imagine that two guys who sell auto parts walk into a mechanic’s shop. Larry is sharply dressed and a fast talker who seems to know every trick in the book. He comes into the shop announcing to the workers all of the different parts that he has and why he’s the best person to be selling them parts. He rambles on and on about the various perks of their auto parts company and the benefits that they have. As he talks, the mechanics are quietly and politely sitting and listening to him, but it’s apparent that they don’t trust Larry. He’s too slick, and it’s obvious that he’s using tactics in attempt to make the sale.
The Human Approach
Frank, dressed much more casually and with a slower, more methodical voice, takes a different approach. He says, “Listen, you guys know this job better than I ever will. Tell me what you need, and let me see if I can get it for you?” Before you know it, the mechanics are opening up to Frank, sharing their thoughts and feelings about the auto parts that they’ve used over the years. Notice the difference. Frank’s approach gets the client talking, keeping the focus on what the client needs and wants. It’s honesty and openness. It doesn’t feel like an elaborate scheme. At Unitel, that’s the approach that we use. Our consultants are open and honest in an attempt to build a relationship. We try to be far more like Frank than Larry.