One of the most important parts of your small business strategy may be customer acquisition.
However, while that is very important, it should be noted that studies have shown that keeping a customer is actually 5 – 25 times cheaper than getting a new one.
But how exactly do you keep a customer around to buy from you more than once? Well, one of the most important ways is to keep your customers happy.
Happy customers will come back for repeat business. So, if you can keep your customers happy and increase your customer service, then you can help increase customer retention.
We’ll show you the best way to help you increase your small business customer retention.
Measure churn rate
Your churn rate is defined as the rate at which your customers are leaving your company. It is normally calculated as:
Churn rate = customers lost / customer at beginning x 100
For example, if the amount of customers at the beginning of the month was 200 and your customers lost this month was 40, then it would look like this:
Churn rate = 40/200 x 100 = 20%
This can help you measure your churn rate. Should there be any changes to your churn rate, it can be good or bad.
If your churn rate increases, this means that your customers are leaving at a faster rate, and you need to change something quickly.
If your churn rate is going down, then you need to find out why and work harder to continue doing that, as it means your customers are more satisfied.
Secondly, you need to find out exactly what is and what isn’t working with your business and customer service.
You should be constantly asking for feedback (although not from the same customers). You should also ask customers for feedback when they leave your business.
By getting constant feedback, you are keeping your hand on your customers’ collective pulse and making sure you’re ready to respond ot changes.
You can get customer feedback by using customer satisfaction surveys and feedback boxes in your shop or on your website.
Give your customers discounts and promotions
Lastly, you should be working on providing discounts and promotions, especially for those goods and services that can have more flexibility in pricing.
Discounts can be great if they’re used effectively. However, if discounts are given to everyone at all times, then it can have a negative effect of devaluing the product in the customer’s eyes.
Even better is promotions, which does not lower the price of one product, but rather packages two products together for a better price than what they would’ve cost individually.
Psychologically, this sits better with customers who can maintain their respect for the brand while even getting excited about it.
Customer Retention for Your Business
With these three major steps, you can be sure to keep your customer satisfied. Greater customer satisfaction means you can vastly improve your customer retention.
With greater amounts of customers staying around in your business, you’ll be able to improve your business and work to expand it.