Loyalty Customers

Three Rules of Customer Retention

Written by Jay Shapiro for Gaebler Ventures

It is far easier to sell to existing customers than to constantly seek out new ones. Unless of course, they have forgotten that you even exist.

If you do your job properly your existing customer will be satisfied with the product and service you provide and will only need the smallest encouragement to buy from you again.

Three Rules of Customer Retention

The main reason 'your' customers go elsewhere for their next purchase is apathy. Especially with the Internet making it so easy to buy from anywhere there is little incentive for a customer to stay loyal. So your goal is to burst that apathy bubble and give those customers a reason to come back to you time after time.

We are all someone else's customer so we have a fair idea of what makes us like a shop or a web site and what will drive us away. It is not enough to have your own opinion though, make sure you ask as many customers as possible for their input and then make sure to act on their suggestions. Also, you should tell those customers who gave feedback that you have acted on their input; that is one customer retention technique that really works.

Rule 1:

Gather contact information and gain consent to use it. Email spam has made most people reluctant to give away their email address but as this is by far the most cost effective way of keeping in touch with people it should be your goal to engender enough trust that your new customer will give their email address into your care.

Rule 2:

Make it easy for people to buy from you. This may sound obvious but how often have you found yourself wandering around a store looking for someone to help you; the same goes for web sites that don't have a clear and simple route from browsing to checkout.

Rule 3:

Keep in touch. This is the most dangerous but potentially most rewarding of business activities. Too much communication will convince a customer that they never want to deal with you again, too little and they forget about you and their next purchase is likely to be from one of your competitors.

Is your current customer communication strategy to send a reminder when it is time to renew or buy again?

Every organisation should have a communication plan that kicks into action for every new customer.

It should start with a thank you; as part of that thank you, you might include a discount voucher or code they can use against their next purchase. It is a good idea to make that offer relevant to the product or service they bought.

The next communication should be useful information relevant to their purchase, a how to guide or something similar. It should not include any offers or attempts to sell. The aim of this communication is to build the trust levels to make future purchases more likely and that doesn't happen if all communications include the hard sell.

Further communications can be a mixture of useful information and sales offers, keep these down to once a week at the most for emails, once a month is better.

Jay Shapiro is a freelance writer based in the UK. Jay has a particular interest in the emotive aspects of the entrepreneur's character. "Alongside the nuts and bolts of business, the character of the person is often the ingredient responsible for success."

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