But do you have any idea how costly it is? If you lose just one customer a day who spends a mere $5 a week with your business, that could result in a loss of $94,900 a year. Just do the math: $5 x 52 weeks’ x 365 days = $94,900. A typical service business can lose 15% to 20% of its customer base every year. So the potential loss from customers who jump ship is huge.
1. Why do customers defect?
Generally, it’s because they are not satisfied. It’s not that you aren’t doing your job; it’s just that you aren’t doing enough to give them a good reason to stay with you. This alone can account for over 90% of lost business. So the question is, how to satisfy your customers and keep them coming back?
The answer lies in good communications and in developing a true relationship with your customers. The first thing to do is to ask questions. Customers almost never tell you when they like something and rarely tell you when they don’t. So it’s up to you to ask them, “What are we doing right? What are we doing wrong?”
You can do this with a simple direct mail, email, website or any other preferred communication channel, by using a questionnaire or survey. It should be short and easy to complete. Ask a few open-ended questions so people can express themselves. You might be surprised at what you find out.
Plus, the fact that you ask will often make people feel good about your company even when they’re not happy about something. Most companies never ask. Once you discover what people like or don’t like, you are able to fix what’s broken and improve what works.
2. Staying in touch yields a better engagement.
You should also stay in touch with your customers. Many businesses email a newsletter with information on new products, helpful articles, inside company information, stories about customers, and other items people find interesting.
Tip: Be different. Print a newsletter and mail it.
Special letters or mailers are another way to stay in touch. You can thank customers for their business and offer special discounts or suggest related products and services. Everyone loves coupons!
3. Lastly, be generous.
Everyone wants to make a profit, but customers tend to be loyal to businesses that treat them like friends. Little acts of unexpected generosity can have a surprising effect on your customers. A $25 coupon for loyal customers or a small extra service for new customers may not seem like much, but these gestures will be remembered.
Ask. Stay in touch. Be generous. It’s not rocket science. In the end, business is always about more than sales. It’s about relationships. Engagement. Nurturing customers and keeping them loyal is ultimately cheaper than seeking new customers. It’s money in the bank!
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