Why is building long-term customer relationships essential, especially for small businesses? Consider the powerful message behind these two statistics
- 80% of your company’s future revenue will come from just 20% of your existing customers. (Gartner Group)
- Improving your customer retention by just 5% can increase your company’s profitability by 25%. (Bain and Company)
As you can see, repeat customers are often more valuable to your long-term business success than new ones. Why? They are more likely to refer your business to others and to buy your products in the future. They’re also less likely to do business with your competitors, and they typically cost less to serve. To put it simply: Take care of your customers, and they will take care of you.
If you haven’t put together a customer retention strategy, then now’s the time to start thinking about one. Much comes down to fostering meaningful relationships with your customers, and we have three tips to help you do just that.
3 Ways to Build Meaningful Customer Relationships
The key to enjoying the business benefits of repeat customers is developing an authentic, ongoing relationship with them. You can do this by not only offering consistently great customer service but also engaging your customers to join your community and offer their advice.
1. Provide a Consistently Good Customer Experience
Good customer service plays an important role in encouraging customers to continue working with your or buying from you. After all, would you return to a restaurant where you’ve been poorly treated? Strive to always provide personal and friendly service. If you have employees who interact with your customers, consider this aspect of their job while hiring, and make customer service an important part of ongoing employee training.
Keep in mind that a customer’s overall experience isn’t just about the service they receive. It also includes how well their digital interactions with your company function, the product or service delivery, and whether they feel your company followed through on all its promises. Make sure that your digital services, such as online checkout, are easy to understand and run smoothly. And keep any promises you make when it comes to delivery time lines and how your end product or services perform and hold up.
And, by all means, if you make a mistake, own up to it and make it right.
2. Inspire Reciprocity
Many times, when people receive something, especially something unexpected, they’re hit with the desire to give back. This concept is called reciprocity, and it applies in business, too.
Depending on your business, you can:
- Offer free samples or gifts related to what your customers buy
- Issue loyalty cards that keep customers coming back for more
- Create and share value-added content, like how-to videos
When customers feel that you’re giving them value that goes beyond the product they purchased, they’ll not only appreciate it but also want to give back in the form of positive reviews, referrals, and repeat business.
3. Ask for Feedback
Asking your customers for feedback not only shows that you value them, but also results in informative market research about how your products and services should evolve—or even new market segments you could target. An important caveat when seeking customer feedback? Ask for their advice, not their opinion, says Dr. Robert Cialdini, author of Influence: The Psychology of Persuasion.
“When you ask for someone’s opinion, that person takes a half-step back from you. They focus inside themselves and search for their opinion. If instead you begin by asking for their advice, they take a half-step toward you psychologically,” Cialdini explains. “Research shows they support [your business] down the road to a greater extent because they feel more a part of it.”
Engaging your customers for their advice often inspires them to come back and experience the effect of their contribution to your business, so you’ll not only benefit from the advice, but also from the repeat business.
Read More: Keep Customers Coming Back for More
To build long-term relationships with your customers, you need to understand them. So, try to learn more about your customers, beyond their ideas about how you can improve your business and its products. For information on how to carry out this meaningful market research—both online and offline—download our eBook Keep Customers Coming Back for More.
Keep Customers Coming Back for More
In it, you’ll not only read more about Dr. Cialdini’s concepts, but you’ll also hear from two small business owners who’ve applied his principles to grow their businesses. You’ll also learn additional customer retention tactics to help you create—and sustain—lasting and authentic relationships with your customers.