How to Encourage Customer Loyalty in Your Small Business, and Why It’s Critical to Your Success!
You’ve probably heard the adage that “Keeping an old customer is cheaper than converting a new one.” But just how much cheaper is it? According to survey data presented in the new SCORE Infographic out this month, securing a new customer is 6-7x more expensive than keeping an existing one, and loyal customers are worth up to 10x the amount of their first purchase! Given these findings, it becomes obvious that customer loyalty is a worthwhile goal for your business to aspire to, not only for marketing and branding reasons but because of its impact on the bottom line as well.
If you’ve ever wondered how much of an impact customer loyalty really makes to a small business, check out the infographic “Customer Loyalty: Winning Them Over Is the Key to Growth” for the full visual rundown in terms of real dollars and cents.
Since it’s clear that customer loyalty is imperative to your enterprise’s success, let’s further explore the options and techniques others have used to cultivate strong customer devotion. The experts at the SBA recently offered “4 Tips for Customer Loyalty Programs” including:
- Loyalty Punch Cards
- Opt-In Programs
- Digital Days
But, the SBA warns, “There’s no ‘one size fits all’ approach for all businesses. Observe customer trends and listen to what they say so you’ll be able to think of ways to make your incentives and rewards as unique as your business.”
Check out the full blog post to learn how to best employ these tactics and how to determine what is really important to and impactful on your specific customer base.
Tips to Employ Everyday
Seasoned SCORE mentor Stephen Engelhardt recently shared his “Expert Tips for Sales and Customer Loyalty” in which he discusses how to embrace the sales process as a small business owner and how to foster a long-term relationship with your clients and customers. Stephen addresses the hard questions like,
- How can you turn a problem or complaint into an opportunity to win over or win back a customer?
- What are some simple ways to build customer loyalty so that they’ll keep coming back and hopefully spread the word about your small business?
- Should you be up front about wanting to do more for customers, or is a more subtle approach better?
He shares experienced advice like, “I made thousands of dollars in sales from problem clients because I read their mindset and what was needed to make them happy.” Read the interview for all of Stephen’s expert insights gained as a business owner and a SCORE mentor.
Boosting Customer Loyalty with Big Data
Finally, like most aspects of your business, it’s important to periodically take a step back and survey your internal statistics regarding customer loyalty to evaluate trends and see what can be improved.
"Customer data gives businesses, especially smaller ones, a great opportunity to reward customers with loyalty programs that pay attention to their specific purchase preferences," said Tyler Roye, CEO and co-founder of e-gift card retailer eGifter. "[This can] include products purchased, channels viewed and purchased through, and even currencies used to purchase. Drilling down in those specific areas allows businesses to offer the most enticing deals and programs for customers, not only making them more likely to spend with the business, but also making them feel valued as individuals."
In her article on the topic, Nicole Fallon, assistant editor of Business News Daily, suggests two places to focus your data collection relative to customer loyalty: social network analysis and cross-IT integration.
You may have noticed that all of these experts have agreed upon the fact that knowing a customer’s needs and catering to them wins you their trust and repeat business. Knowledge is power and having that knowledge specific to your target customer may be the key to generating up to 10x more revenue in your small business. Worth the investment, no? If you’re getting stuck on new incentives to offer your customers or how to delve deeper into analyzing your current tactics, tap into the knowledge and experience of a SCORE mentor who has been there and done that. Connect with a SCORE mentor online or at a local chapter today!
