Most businesses accept loss of customers as a fact of life — a cost of doing business. But it costs much more to obtain a new customer than to keep an existing one. If you can increase your customer-keeping rate by as little as 10%, you can increase your long-term revenues by more than 50%. An amazing increase in income, if you think about it.
One of the reasons for this is that it costs five to 10 times as much to acquire a new customer as it does to sell products and services to an existing customer. Once you’ve acquired a customer, you no longer have to convince them that you’re the company to buy from. Your primary goal is to let them know how much you appreciate their business.
I read somewhere that a jeweler once said, “If I lose the diamonds, the insurance company will pay for them. But if I lose my customers, I’m out of business.”
Something to always keep in the front of your mind is: A business only has two functions: to serve its customers better than anyone else and to make a profit. If your business fails in either function for any length of time, it will fail. Customers are your business! This is true in boom times and in depressed times.
Why do customers leave or buy once and never again?
A consumer Services Institute study showed that:
- 1% die
- 3% move away
- 5% buy from friends instead of from you
- 9% prefer the competition
- 14% judge your business by a bad encounter
- 68% leave not because of anything you did. They’re not angry or dissatisfied with you. They left because they thought you didn’t care about them. You didn’t make them feel special.
Yes, customers do move and most didn’t leave because of anything you did. They’re not angry or dissatisfied with you. They left because they thought you didn’t care about them. You didn’t make them feel special.
Customers should be more than just a one-time sale if your business is to grow. They are long-term assets who must be nurtured and not simply harvested. Over the lifetime of your business, a loyal customer can be worth thousands of dollars with only a small investment on your part. But even the most loyal customer may think of you only as a source for holiday or thank-you gifts — unless you “give them a reason” to buy every season.
Develop a year long campaign. Don’t put everything into one contact or one mailing.
Remind them on a regular basis of all the different kinds of gifts you offer. Do they know that you make gorgeous baby gifts? How about wedding presents or shower centerpieces? You have to tell them — then remind them — then tell them again a few months later. Let them know that you offer more than just holiday gift baskets. Tell them that you’re a year-round gift service that can provide unique gifts they can’t find anywhere else.
I’ve used a cookie cutter with a folded card tied on with ribbon. The card says “My business isn’t a cookie cutter. Is yours? Let us design unique marketing tools for you to make sure your business stands out from the crowd!” Inside is a cookie recipe. On the back is my contact information.
Position yourself as the gift-giving expert and use every chance that you can to “give them a reason” to buy from you.
Basically the secret to keeping your customers is simply having:
And Appreciation for your customers
And, most important of all, letting them know that you do!