Where are you putting your small business’s marketing dollars? More than seven out of 10 small business owners in a recent survey (72 percent) say most of their marketing budget goes to acquiring new customers. Just 28 percent spend the bulk of their marketing budgets on customer retention.
Of course, if your business is just starting out, acquiring new customers has to be your primary concern. But once you get beyond the initial stages, the key to real growth is not so much getting new customers, but getting more sales, bigger sales and long-term loyalty from the customers you already have.
Although small business owners in the survey agree that the bulk of their revenue comes from loyal customers, fewer than half (49 percent) have a customer loyalty program or some other type of customer retention plan in place.
Without a well-thought-out plan to increase customer loyalty, your business could be leaving money on the table. What's worse, because it costs more to acquire a new customer than to upsell an existing customer, you're spending more time, effort and money than you need to for the same results.
How can you maximize profits from existing customers?
1. Reach out with email.
Encourage customers to sign up to receive marketing emails from your business by emphasizing the benefits they’ll receive. For example, if you own a retail store or restaurant, promote your email newsletter as a way to get informed of new products, special events or upcoming promotions. If you own a B2B business, explain how your email newsletter will educate and inform them so they can get more out of the products or services they purchased from you.
Don't just send generic emails. For best results, your email should be personalized to each customer. Segment your email lists based on your customers' buying habits, demographics and interests. That way, you can send information and offers that are more likely to encourage action.
Design mobile-optimized emails. Most people now check their emails on smartphones first, so if they can't easily view your message, they're likely to delete it. Are people opening your emails, but not clicking on them? That could be a sign that your emails aren’t displaying properly on mobile devices. The landing pages linked to in your emails must be mobile-optimized, too, so customers can take action on their mobile devices if they want to.
2. Stay in touch on social media.
Connect with your existing customers on the social media channels they prefer. For instance, if you own a B2B business, you and your salespeople should connect with customers on LinkedIn, responding to their posts and sharing relevant information. For a B2C business, get customers to follow you on social media by focusing on the benefits they’ll receive — special offers, alerts on new products or services and invitations to events. Place social media icons prominently on your website and marketing emails so people can just click to follow you.
3. Focus on customer service.
Outstanding service is essential to building loyalty. Regularly review your customer service processes and measure customer satisfaction using surveys and customer feedback. Provide ongoing training to your customer service team based on what you learn so that they’re continually improving.
4. Create a retention-oriented sales team.
Make sure your salespeople know how important customer loyalty is to your business’s ongoing success. Train them to gently upsell products and services to existing customers without being pushy. Keep a customer-focused attitude: Make sure your salespeople are truly listening to what the customer needs and finding tailored solutions, rather than just pushing for the sale.
5. Set up a loyalty and rewards program.
There are digital loyalty solutions available for all types of businesses, from retail or restaurant to service operations. Look for a loyalty program that’s simple for both you and your customers to use. The best programs also capture customer data such as what customers purchase, how often they buy from you and what types of offers they respond to. Using this information, you can tailor future marketing appropriately.
Of course, every business needs to acquire new customers to keep going. But nurturing existing customers, increasing their loyalty and earning bigger sales from them is an equally important part of the puzzle.
Need help enhancing your customer loyalty or coming up with a retention plan? The experts at SCORE can help. Visit www.score.org to get matched with a mentor who can advise you.