Kim Peterson, CEO CommonSenseHealth.org for
How much money does it cost to get one customer? Any idea?
To be an entrepreneur requires great optimism, and a very strong belief in how much customers will love your product or service. Unfortunately this attitude can also lead entrepreneurs to believe that sales will roll in far faster and less expensively than is actually the case. When you underestimate the cost of acquiring a new client, along with having no strategy to keep customers once they have opened their wallets, this could spell big trouble for your business.
When you consider marketing salaries, advertising costs and what it takes to bring an individual from prospective client to paying customer it may very well be more than you think. It would stand to reason that after you have incurred the expense of finding a paying customer, it would be a great idea to go ahead and keep them.
Inc. magazine considers you ask the following question ...
What revenue growth will we achieve if we keep our existing customers for just one additional month/order, on average?
• What will it cost us to do this by, say, improving customer service or adding customer benefits?
• How does this growth compare, both in magnitude and cost, to acquiring new customers?
It’s cheaper, easier, and more effective to retain current customers than it is to acquire new ones. In fact, if this business can retain all of its customers by just one additional month on average, they can achieve an additional 3 percent of annual growth. If they can retain their customer base for four additional months, they can create double-digit growth–without adding a single customer.
Here are 6 proven activities you can take to be proactive in protecting the investment you've made in acquiring those precious customers.
Sell...then sell again --- Thank your customer for the initial sale and remind them again why they’ve made the right decision to deal with you. Ask for testimonials and referrals soon after purchase. Ask them to "Like" and tag you on the various Social Media platforms you are active with and be sure to put a system in place to sell to them again, and again, constantly proving that they made the right decision.
Under promise and over deliver --- Promise a turn around time that you know you'll be able to beat, give a free gift with purchase that you don't advertise; even something as simple as a high quality dark chocolate truffle can go a long way towards customer satisfaction.
Be sure you put in place a system for discovering complaints. Customers who complain are giving you a gift, they are giving you another opportunity to make it right and learn how to improve upon your systems and employee interaction strategies. Social Media can be a great place to keep your door wide open as to your customer feedback.
Reach out to your former customers --- Send consistent Newsletters, use direct mail and Social Media to educate and stay connected with former clients. You can hold live events, make phone calls, send “thank you’s” and create special offers for former clients only. Reaching out to customers who already know you and your products and services is one of the easiest and fastest ways to make additional sales. Keeping in touch with your former clients will turn more and more of them into long term loyal customers.
Exceptional Customer Service --- The key factors involved are...dedication to customer satisfaction by every employee --- instilling this as a corporate philosophy; providing immediate response to both positive and negative feedback; going above and beyond the call of duty; delivering what you promise before AND after the sale; a "hassle free" and "customer is always right" philosophy. Exceptional customer service builds fortunes in repeat customers, whereas poor service will drive your customers away from you and towards your competition.
Provide a great product or service --- Over the long haul, overall success and customer retention belongs to those who do not take shortcuts. Customers will be attracted to you if you are open and honest with them, meet and exceed their expectations, genuinely care for them and take an interest in their wants and needs. Remembering the golden rule "Treat others as you would like to be treated." can go a long way towards customer retention and overall satisfaction.
Always keep them on their toes --- Give unexpected gifts or rewards to customers. Offer a free service if they bring a friend or partner with another business (a Spa, clothing boutique or health food store) and offer a free product the next time they are in as a special "customer appreciation gift". Unexpected rewards can have a powerful impact on building customer loyalty while having the ability to increase sales in the process.
Initiating a solid customer retention strategy will save money and increase sales in the long run; as well as building a powerful platform with which to attract those who haven't had the pleasure of doing business with you and your team!
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