Companies allocate huge amounts of money to advertising, and their primary purpose is to attract new customers and clients. Being innovative is a requirement for doing business and it makes sense that businesses implement innovative strategies to continually attract new customers or clients to replace ones who leave as well as widen their customer base.
On the other hand, what about current customers? Would it not make sense that customer loyalty and retention should begin with current customers? These same companies have thousands of customers whom they overlook when they offer promotions and incentives. Doesn’t it make sense to encourage customer loyalty and retention in your current customers?
It’s likely that almost everyone reading this has or know someone who has had a similar experience and it begs the question, “What are these companies thinking? “Have they not heard of customer appreciation?” “Doesn’t customer loyalty and retention mean anything to them?”
Joseph Jaffe, in the book Flip the Funnel: How to Use Existing Customers to Gain New Ones stated that, “If we’re able to elevate retention (customer service, dialogue, and customer outreach…) to the point at which it becomes a strategic imperative at the expense of the traditional acquisition efforts from an optimization and budget allocation standpoint…then maybe, just maybe, we’ll be able to do business for the better.”
Customer loyalty is something that can grow exponentially when it’s shown to the customer. There are lots of testimonials and stories that demonstrate how customers are motivated by the loyalty shown to them by the company so that they would not think of doing business elsewhere. Yes, people can be motivated by money as in discounts. However, when this is enveloped in a way that demonstrates that the reason for the discount is in appreciation for their being loyal customers, it engenders even more loyalty. The need for recognition and appreciation has been met.
Customers want to know you appreciate their business and that you value them. No customer wants to be viewed as an interruption of your day. The need to be appreciated is a basic need of all humans, and your customers no less.
Instead of paying thousands of dollars to lure new customers, wouldn’t it be a less expensive proposition to do whatever is possible to keep your current customers happy? Interestingly Brian Woolf, the author of Customer Specific Marketing-The New Power in Retailing and a loyalty marketing expert, noted in his research that only 1% of new customers become the best customers of a business. It means that it would be in the best interest of the business for customer loyalty and retention to begin with existing customers.
As a small business owner, solo-professional, or entrepreneur you recognize that your customers and clients have a large number of options of where and with whom to do business. What do you currently do to encourage customer loyalty and retention? Do your customers and clients know that you appreciate them? I’d love to hear your responses and experiences.