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Keeping your customers coming back for more

Thursday, 21 February | By Nina Hendy

feature-trolley-thumbWise entrepreneurs put systems in place from the onset to ensure customers come back again and again.


This is because they know that studies show it costs substantially more to generate a new customer than maintain an existing one.


Anyone that shops with you regularly is less expensive to manage because they have an understanding of your business process, methods and products, says Philip Owens, principal of performance and leadership firm, Resourced Leaders.


It’s important to understand what it costs to serve your customers, acquire new customers and the value return of their custom, Owens says.


“Before you dismiss your current customer base in favour of hunting new clients, it may be worth considering how much you invested in getting them to be customers in the first place,” Owens says.


“When you ask this, you may recognise that unless you get more value from them via additional sales, you’ll end up losing money.”


Sydney’s Catherine DeVrye, who authored Good Service is Good Business and 50 Shades of Great Customer Service, agrees, warning that it can take years to win a customer, but only seconds to lose one.


“We know it costs five times more to obtain a new customer than retain an existing one, and that a 5% increase in customer loyalty can mean up to an 85% increase in profits,” she says.


Lure customers back for more by rethinking the way you allocate your marketing budget, suggests Melbourne business coach and author of Sales Seduction, Rhondalynn Korolak.


“So many businesses spend the bulk of their marketing budget chasing new customers or re-engaging customers that have left and gone to the competition,” she says.


Instead, businesses should spend at least 75% of their budget keeping existing customers tuned in. “I recommend spending your time analysing your current customers – what are they buying, what could you introduce them to that would make them even more profitable to you, and how can you drive frequency?,” Korolak says.




Give more than customers expect and they’ll come back and spend with you again, Owens says.


“If you outperform their expectations, they’ll be satisfied. If you underperform, they’ll be frustrated. Often, the simple fact of satisfying the client is enough for them to remain a loyal customer.”


Always remember that people want to feel included, in control and liked, he says.


“In any attempt to keep a customer, ensure you consider how you, your interaction and the use of your product or service allow them to feel. Making a customer feel insignificant, excluded, incompetent and disliked is the fastest way to push them in to their defensive profile and have them run for the hills.


“Making someone feel liked costs nothing more than offering what you promise and being considered in your approach,” Owens says.


DeVrye adds that making sure your employees are happy and content plays a big part in enabling you to deliver on your promise.


“Remember to reward staff along the way for desired behaviour, and not just give them a boot in the butt when things go wrong. Like finding new customers, it takes a lot longer to go through the process of hiring competent new staff than it does to look after your existing ones,” she says.


Regular communication


Social media is a great way to open the lines of communication and support with existing customers, says Fergal Coleman, social media advisor at Melbourne business advising firm, Symphony3.


“Even better, encourage your customers to support each other via social media, and you will build even greater loyalty,” Coleman says.


But it’s important to know when to follow up on a post with a phone call or email; particularly if a customer is disgruntled, he says.


Aside from social media, consider keeping in touch with existing customers via mobile marketing. Businesses can use mobile communication to enhance customer support, let customers know when a sale or special offer is on or wish them a happy birthday, according to Shaun Dobbin, chief executive of mobile service provider Gomeeki.


“Consumers rarely leave home without their mobile device and therefore it proves to be a very reliable way to keep in touch with customers.


“It can complement all other forms of your marketing mix, be it a number to text on your ad on the bush shelter, a QR code to scan at the in-store checkout or a coupon sent from your website to their mobile device providing an incentive to visit the store,” Dobbin says.


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A little loyalty, please


Loyalty programs are also a great way to encourage repeat custom, says Laura Tinnelly, marketing and communications consultant, leadership development firm, Maximus International.


Start by deciding what you would like to reward, such as a new purchase, loyalty or lifetime value and then build your loyalty program, taking the time to acknowledge these milestones, Tinnelly says.


“You don’t need a huge budget. Sometimes a simple handwritten note will do the trick. Pick a handful of tactics and do them consistently and well.”


Loyalty forms a big part of the success of eco living website ettitude.com.au, according to founder Phoebe Yu, who says 60% of her revenue comes from repeat custom. She regularly offers existing customers special offers and discounts and also invites them to take part in Facebook competitions.


“We also constantly ask the opinion of existing customers about future product development on Facebook and use SurveyMonkey. Often, once those products are available, those who took part in a survey are very inclined to buy,” Yu says.


But despite all this, a Melbourne businessman admits that retaining customers is an uphill battle.


Stan Gordon is the CEO of the Franchised Food Company, which incorporates Cold Rock, Mr Whippy, Pretzel World and Nut Shack. He has several loyalty schemes in place across these brands.


The key to retaining customers is to make people love the experience of being in your store, watching your show, eating your food or using your product, he says.


“Our loyalty schemes are there to reward customers, but in my opinion, no matter how much you reward someone, your original offering has to exceed their expectations for customers to want to be rewarded by you in the first place,” Gordon says.


Top tips:

  • Work out what it costs to retain current customers and find new ones
  • Make sure your customer service is top notch
  • Consider introducing a loyalty program
  • Keep in regular contact with existing customers
  • Resolve customer complaints quickly and fairly