In hard times, often our first instinct can be to jump on any and all ideas to acquire new customers. After all, getting new customers typically means more revenue for the business, right?
Well, not always.
While you shouldn't entirely forget how you're attracting new customers to your business, during hard economic times, it's even more important to focus on the customers you already have.
When it comes to retaining our customers, it isn't always as simple to think up a strategy that will increase retention. Here we'll discuss 3 ways that you can potentially improve your small business's customer retention during hard times.
The words "loyalty program" may make you feel like you're about to join an airline's marketing program, but it's a lot simpler than that. When we say loyalty program, we mean a simple system to reward your customers for using your business when they need your product or service.
If you go to a coffee shop and have a punch card that gives you a free coffee for every 10 coffees you buy, or belong to a program where, after spending a certain amount of money, you get a discount, then you belong to a customer loyalty program.
Hubspot reports that 52% of loyal customers who were offered a loyalty program chose to join in on the benefits. That's over half of your customers!
Brainstorm how you may be able to reward customers with discounts or promotions based on how often they do business with you. Setting up a loyalty program for your small business could plant seeds of long term relationships with your customers.
We've all heard the phrase "two is better than one." Oftentimes, small businesses can thrive when they combine their initiatives.
See if there are other businesses in your area and/or industry that would be interested in partnering with you in offering a loyalty-based discount program for customers who may enjoy both company’s products or services. You can always approach the conversation by bringing up your goal to increase customer retention, and ask if they have any customer-retention strategies of their own that they’d be willing to share.
For example, say you're a hair salon owner. You could connect with a nail technician to see if they may want to offer your customers a promotion if they hire both you and the nail technician.
Or perhaps you're a contractor who has many customers opting to build additions to their homes one season. Could you possibly connect with a roofing business that may be able to give your customers a discount if they do a specific amount of business with you?
Customer loyalty programs help to increase the likelihood of the customer continuing to hire you for specific jobs and projects, but that doesn't mean that the loyalty program should exist as the main method of communication.
Just because you begin offering customer loyalty programs, doesn't mean you should slack on building a relationship with your customers. Continue talking to them — whether in person, on the phone, or via email. You also can use your accounts on social media channels to keep customers updated on what promotions are available.
When you talk with customers, feel free to ask them what sort of promotions they may find attractive to them and what they may be interested in if you made it available.
We know that customer retention is easier said than done. And it's not something that you can ensure with a quick fix — retention requires work you put in that will pay off in the long run. If you haven't been thinking much about retention until now, it's OK. We have plenty of resources to help you set your business up for a successful future!
Get an affordable & customized policy in just minutes. So you can get back to what matters: Your business.Start Here >
I’ve told stories since I learned to talk and written since I could hold a pen. As a small business owner myself - I'm a freelance writer and yoga teacher - I love contributing to the entrepreneurship community in different ways (including writing for Simply Business!). When I’m not drafting articles for SB, I can be found on my yoga mat, perusing an indie bookstore, and writing (with my cat nearby of course).
This content is for general, informational purposes only and is not intended to provide legal, tax, accounting, or financial advice. Please obtain expert advice from industry specific professionals who may better understand your business’s needs. Read our full disclaimer
*Harborway Insurance policies are underwritten by Spinnaker Insurance Company and reinsured by Munich Re, an A+ (Superior) rated reinsurance carrier by A.M. Best. Harborway Insurance is a trade name of Simply Business, Inc., which is a licensed insurance producer in all 50 states and the District of Columbia.