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Keep the Customers you Already Have …

Well, no matter what the banks and the business tycoons and corporations say about the recent recession, most of the small business owners I know are still feeling the effects of a weakened economy. Many businesses have had to change the way they do business to stay in business. Many others just don’t know what to do. Studies seem to indicate that when the economy slows, many customers will cut back and buy only what they feel they need the very most. That means less customers and less money in your pocket.  So keeping the customers we already have makes a lot of sense!

 So, how can we keep our customers coming back and increase our profits during an economic slump? Try these “old fashioned,” never-go-out-of-style suggestions. They work! My dear friend, the late and very great, Arch Brown, lived by this adage he called “The Golden Rule” – providing outstanding customer service. Everyone claims to offer it, but few actually do.  Buying is about an experience – not just making a transaction. So your job and the job of all your employees is to create a wonderful experience for your customers every single time they give you the opportunity to serve them.

Add personal touches to your service. Try to personally connect with your customers regularly. Remember their names and use them. Call them when you know something they’d be interested in comes into the store. Send thank-you notes, birthday cards, anniversary discount notices, emails, etc. These are small signs of appreciation that pay off big -  by bringing customers back again and again and having them tell their friends about it too! And that leads to the next point:

Reward your customers’ referrals. Word-of-mouth advertising is FREE! If you reward your current customers for sending their friends, family and neighbours , etc to your business, you not only get a new customer, but you ensure that the customer who referred them will be back to cash in on their rewards – whether it’s a discount, a gift or another type of give-away.

Develop a loyalty program for your good customers. Don’t groan! Statistics show that, believe it or not, loyalty programs work. Customers love getting rewards or discounts for making repeat purchases.  If you remember that generally speaking 80% of your business comes from 20% of your customers, then it makes sense that if that 20% is enrolled in your loyalty program you will see your sales increase.  Which also leads to the next point: Target your marketing efforts to your best customers. Don’t waste your time and money advertising to the 80% of your customers that don’t make the bulk of your business.  Don’t stop advertising in a poor economy – that is a common mistake. Advertise better!  You can’t afford to lose your best customers to a competitor who’s aggressively wooing them because you’re not.

Finally, remember to build an honest relationship with your customers.  Your customers want to have a place to call their’s. You want to be that place. And you do it by developing a real relationship with them.  Keep in touch with them. Try to provide relevant information via newsletter or your website that serves their interests, solves their problems. Become an expert resource for them by hosting seminars, sending articles, tips etc for free. Follow up on sales by asking if you can answer their questions, or get them to fill out a survey on their experience with you. Customers who know you, trust you, and if they also like you, you will feel like a friend.  Relationships work both ways. In return for all the extras you give them, they will buy more frequently, provide great word-of-mouth advertising and give you great feedback.

Tough economic times are hard for almost every type of business. But most economists agree that these conditions are temporary and will improve. In fact, many feel that they already are improving. As Arch Brown would often say, ‘a slow economy is a challenge which presents an opportunity for small businesses to compete. If you can retain your best customers during these difficult times then just imagine how great it will be when  consumers start spending more freely again.’

 Terri Plaxton Smith is the business consultant for the Greater Barrie Business Enterprise Centre, 24 Maple Ave., downtown Barrie.  For information and assistance, call (705)720-2445.

Look for Terri Plaxton Smith's columns in the pages of Huronia Business Times.