Business analysts know that it costs a company much more money to get a new customer than to keep doing business with their existing ones. Thus, to be as profitable as possible companies are urged to have loyal customers that keep coming back again and again. Unfortunately, this is easier said than done, and focusing all of your efforts on keeping existing customers is a sure way to ruin your company as truth be told people don't live forever and companies have to look to the next generation of buyers eventually.
1. Nobody Is Loyal Anymore
No thanks to the internet, loyalty is lower than ever before. In just a few mouse clicks, customers can compare the prices of you and a dozen or more of your direct competitors for the same product. Not to mention online auctions where prices can go even lower. This means that people have literally no loyalty - they will choose thatever retailer offers the lowest price.
2. Bidding Wars
This means retailers often engage in bidding wars. This can escalate to nonprofitable proportions - often retailers sell products for the exact amount they purchased them for from manufacturers. Of course, in order to do business retailers have to pay expenses like rent so they can have a physical store open at all. In addition, utilities, shipping, labor, not to mention possible losses from theft all come into play.
3. Making Money
With all of these costs, youd wonder how they make money at all. Retailers often sell products that require other products in order to function - for example a toy that requires batteries or a printer that needs a printer cable in order to work. Manufacturers could make printers that connect wirelessly using bluetooth, but retailers won't buy them because then there wouldn't be any money to be had. The same is true for the automotive industry - hardly any money is being made on the cars themselves, and the cost of gas is skyrocketing.
4. Cutting Losses
This leads to a worst case scenario - your retail operation has overstock of last months technology and there's already new products out there that customers will select instead. It becomes urgent to sell off your products at a loss just so you have the shelf space to put the new items out for customers to look at.
5. Building Loyalty
Many retailers will offer customers a membership option that will save them money on select purchases within the store. Of course, every retailer has some sort of program like that and so, again, it doesn't matter where consumers shop. Lost leaders can draw customers in, often in the hopes of having them buy more than just the lost leader, but that rarely happens. The same is true for first-time customer offers.
6. Perfection Or The Highway
Customers now demand absoloutely flawless service. Everything from the price to how the product is packaged needs to be, for lack of a better word, immaculate. With a dozen major competitors to your business just a click away, you have to give them some reason for doing business with you other than your price is cheaper. Sell customers on brand awareness or, better yet, offer free extended warranties and free technical support on everything you sell.
How To Keep Customers
Whether the economy is up or down, as self-employed professionals, we all want to be sure we're doing everything to keep our customers. Some of you have shared that your customers are disappearing or just not returning to your business. Some have expressed a concern that their business is viewed as a luxury expense and is the first to go when hard times hit.
So how do your keep your customers on board with you? Here are 5 ideas you may want to think about:
Stay in touch:
Your business should have some consistent method of following up with prospects, clients and customers. If your customers haven't heard from you in months, out of sight, out of mind. Customers need to know that you're there and that you have something valuable to offer them. And speaking of valuable...
Ask them what they want:
If you are not providing what your customers want, they won't stick around very long. And the best way I know to deliver the best products, services, and value is to ask customers and clients what they want and to do so regularly. The needs of our clients and customers change over time. If you asked years ago, you may be way behind really understanding their needs.
What used to be of high interest years ago may have shifted to something new. If you never ask, you never have the opportunity to create something new, tweak your offerings, and remain valuable in the eyes of your clients.
Listen for objections:
When you ask them what they want, listen carefully for objections they share. Too often, we rush to convince customers that their objections are not that important and that they should buy from us anyway. But if it wasn't important, they wouldn't share it. So instead look for the opportunity in the objections. Is it time to offer a payment plan to make payments easier, is it time to add another offering at a lower price point because of economic times, is it time to start offering something new/different to better match their needs?
Listen carefully, take notes, spend time genuinely trying to understand how your business can be of greater value to your clients. You don't have to change your entire business, but a little tweaking wouldn't hurt. That said, sometimes and overhaul may very well be in order.
Create what they want:
Sometimes as entrepreneurs, we are busy creating what WE think is cool and innovative because we have a nonstop supply of ideas. Idea-generation is our gift. However, we should become focused on what our clients and customers want and create that. The other side of this is the myth of "Build it and they will come." Not so. It is not wise to build something then try to find people to buy it. Ask people what they want first.
Ask them for feedback on your product/service: After you have delivered your products and services, don't skip the step of asking what your clients thought of it. You'll never know what opportunities you may be missing if you never ask for feedback. Paying attention to feedback on your existing products and services will give you plenty of ideas for how to keep your customers.
Customers stick around when they get great service, great products, and great results from working with you. But you can't deliver all that greatness unless you're asking them what they want and what they think about your products and services.
Key Questions & Actions:
* Have you asked your customers and clients what they want?
* When was the last time you asked? Have things changed? Is it time to ask again?
* Is it time to do a mini survey to get into some discovery of what will really make them stick around?
Allison Babb has sinced written about articles on various topics from Mortgage, Small Business and Finances. And now I'd like to offer you the FREE Audio for solo entrepreneurs "How to Create a Steady Stream of Clients And Cash For Your Small Business" at:. Allison Babb's top article generates over 12100 views. Bookmark Allison Babb to your Favourites.
