There is no doubt that attracting new customers is essential for your small business. Every business person, especially proprietors of micro, small and medium-sized businesses, are always hungry to increase market share. Turning those first-time buyers into repeat customers, however, is arguably just as important.
Loyal customers are the cornerstone of a successful business. This is as true for ‘mom and pop shops’ as it is for massive corporations. The more a customer returns to your business, the more you can expect your ‘customer lifetime value’ to increase. Give some thought to what you do well, and what would endear a client to want to always do business with you.
This week’s column focuses attention on the reasons repeat customers, and customer retention, are key to a successful business:
It is much cheaper to keep an existing customer than to find a new one. Finding new clients can be expensive and consume valuable resources. Keeping a customer happy, and therefore guaranteeing their future business, is much cheaper.
Repeat customers spend more. Once a customer has bought from you and has had a good experience, a level of trust has been established. The next time a customer goes to make a purchase, they are more likely to spend their money with someone they trust rather than risk the unknown. Your loyal customers are also more likely to buy larger ticket items from you because they are already confident about spending money with your business.
Marketing costs are lower. It is easier to market products and promotions to existing customers. You already have their e-mail address, and they know and trust you.
Happy customers spread the word to their friends. Word of mouth has always been one of the best methods of advertising. Happy, loyal customers are your best marketing agents. People believe their friends when they endorse a product or service, so by keeping your customers delighted you are engaged in powerful organic marketing.
• NB: Ian R Ferguson is a talent management and organisational development consultant, having completed graduate studies with regional and international universities. He has served organsations, both locally and globally, providing relevant solutions to their business growth and development issues. He may be contacted at firstname.lastname@example.org.