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It’s no secret that retaining customers is more cost-effective than recruiting them. But did you know that existing customers are likely to pay more for your products and services, purchase upsell offers and refer your range to their friends?
“The incremental revenue possibilities of aggressive customer retention programs are substantial,” writes David Fish, CEO of IMN (iMakeNews Inc.) in his regular column in Auto Success Magazine. “For auto dealers, for example, the lifetime value of a customer who buys every car from the same dealership and relies on the dealer for service is well over $100,000.” Now that’s a customer worth keeping.
Generating the kind of loyalty that translates into dollars doesn’t take much more than a little ingenuity and common sense. In fact, here are four easy ways to keep customers coming back.
Bulk discounts. Appealing to customers’ wallets is an especially effective approach. A simple example is the Hair Cuttery bonus club card that rewards customers with a free haircut after they’ve purchased nine. You can create a similar incentive program that provides customers with a free bucket for every 10 they buy. Psychologically, customers will return because they don’t want to lose that haircut, uh, bucket of balls you’re giving away. Volume discounts also work well with tokens. Proven approaches are selling an unlimited number of tokens for an annual fee, or the more common “buy-more-pay-less” sale, where you offer 50 tokens for the price of 30.
Bounce-back coupons. A coupon offering a buy-one-get-one deal or a half-price bucket of balls will encourage new and occasional customers to come back, whether it’s next week or next month.
Referral programs. Trade associations are masters at creating member-get-a-member campaigns. In 2005, ASAE & The Center for Association Leadership entered every member who recruited a member into a drawing for a free trip to the association’s annual meeting. Maybe you can’t give away free airfare and hotel accommodations for the Masters Tournament, but you could reward customers with free buckets of balls or lessons if their friends buy a package deal.
Customer service. This is the easiest strategy and probably the most often overlooked. Great service makes consumers feel special, and when your customers feel like family, they become vested in the business—and more importantly, they become regulars. Remember Norm of “Cheers” fame? Learn the names of your most frequent patrons and also instruct employees on how to engage and address all customers.
Most importantly, don’t give customers a reason to go down the road. In the mid-1990s, Xerox Corp. learned that just offering high-quality products and services wasn’t enough to create loyal customers. In-depth customer satisfaction surveys revealed that only totally satisfied customers were more likely to purchase the company’s products in the future. When a problem is brought to your attention, respond to it immediately and let customers know their concerns are your concerns. Use these encounters as an opportunity to turn a negative experience into a positive one. Otherwise, customer loyalty can quickly wane. Remember, if you don’t give your customers a reason to stay, your competitors will give them a reason to leave.
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