February 4, 2014
Over the last few days we’ve spent a fair amount of time talking about the costs associated with acquiring customers and how to determine the total value of each customer relationship. In a 2000 report, Harvard Business Revenue reported that “increasing customer retention by 5% increases profits by 25 – 95%.” Those types of numbers are eye-opening. So the next question is, do you have a customer retention plan?
Customer retention and relationship management sounds like one of those fancy terms that big companies staff for but it’s critical for a small business like yours to be focused on it too. As entrepreneurs, we oftentimes spend the bulk of our marketing energy and money working towards acquiring new customers, but what are you doing to make sure that those customers who have tried your products once or twice are turning into loyal customers who wouldn’t even think of purchasing from your competitors?
There are numerous ideas out there – everything from loyalty programs to subscription boxes – but at its most basic, food entrepreneurs should remember that relationship management is all about relationships. Forget all the bells and whistles; you should look to build authentic relationships with your customers. If you sell at farmers’ markets, from a food truck, or in other public spaces, try to get to know your regular customers. Simple things like asking about their kids or dogs can go a long way in helping them feel like you notice and care about them (and isn’t that something we all want?). Offer your online shoppers ‘friends and family’ discounts or include special gifts in with their orders. Even if you sell wholesale and don’t have substantial contact with the end customers doesn’t mean you shouldn’t focus on customer retention. Look for ways to get to know and engage those customers via social media or other channels.
Customer retention isn’t easy, but it’s not going to happen without some planning and effort on your part. But it’s important enough – to your brand and your bottom line, that you should be focusing on it. So, I’ll ask again, what’s your customer retention plan?
Do you have any great examples of small company’s (yours or others) that are building strong customer loyalty? How are they doing it?
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