Customer retention is the key to brand longevity, customer loyalty, and steady profit growth over the lifetime of your business.
When you’re able to attract and retain customers long-term, you can focus on providing better products and services to the customers you already have, instead of wasting endless dollars trying to attract new customers when your revenue is low.
Customer acquisition is expensive, so it’s no wonder smart small business owners are interested in developing long-term relationships with their customers.
It takes a solid business plan, a customer-centric marketing strategy, and the ability to transform mishaps into miracles to retain customers for life. When these three forces converge, customers don’t just notice; they tell their friends.
Customer Service is Not A Department It’s A Mindset
85% of customers believe that great customer service influences their buying decisions. 
But customer service is not a dedicated department that’s separate from the rest of your business. Instead, it’s a state of mind and attitude that’s incorporated into everything you do – from the way you find new customers to the way you delight them after they’ve made a purchase. 
If the way you treat your customers is so important, both in their minds and in yours, why did nearly 40% of marketers cite customer retention as one of their biggest problems in 2015? 
Small businesses are having a hard time attracting customers and retaining them because competition is so fierce.
Customers have more choices today when it comes to making a purchase. For example, if they are consuming content online, or consuming a steak in your restaurant, they practically have unlimited options for doing so.
As a small business owner, you not only have to strategically position yourself in the marketplace with a strong Unique Selling Proposition; you have to get your products and services in front of the right customers at the right time.
Once you have acquired a new customer, it’s much easier to keep them coming back. Ensure customer retention by applying these 7 secrets for every customer who supports your brand.
#1: Solve a real problem
You can’t retain customers that you don’t have.
How do you find customers and turn them into lifelong fans of your brand? You do so by solving problems that actually exist in the real world.
Take a good, hard look at your business plan and make sure it’s centered around solving problems, addressing pain points, or educating and entertaining prospects in ways that appeals to them.
Many entrepreneurs and small businesses fail because they launch an idea that they think is amazing (i.e. organic vegan gluten-free multivitamins for dogs!), instead of developing products and services that solve a real need for real customers (i.e. flea medicine for dogs).
Make sure your business model is based in reality so you can set yourself up for customer retention success.
#2: Practice inbound marketing
Shouting about your business through a megaphone is no longer an effective marketing strategy. Customers are inundated with information on an unprecedented scale. It is very possible that your outbound marketing tactics can fall on deaf ears.
However, when you create helpful content that answers your customers’ questions and solves their problems, you immediately stand out from the competition.
- Instead of trying to immediately sell your prospects something, try to help them.
- Find out what they need most as it relates to your business.
- Create engaging content that answers questions and solves problems.
That could mean writing a blog post on how to deal with an ant problem, or publishing recommendations for a great local Ethiopian restaurant.
Inbound marketing is all about solving customer’s problems on their terms. This technique allows you to immediately start building trust, which is a key factor later when you’re looking to retain the customer you’ve acquired.
#3: Deliver massive amounts of value
If you want to retain customers for life, you have to offer them huge value at every stage of the buying process. Value isn’t just about getting a great deal on your product. Value is about exceeding customer expectations from their very first interaction with your company through the buying process and beyond.
If a customer finds you through your website, their experience on your site should be helpful, educational, inspiring, or entertaining. When they are astonished by your blog post or email newsletter it can attract and keep their attention. They may think, “If the free content is this great, their paid products must be amazing!”
Once they make a purchase, your job is just beginning. Find ways to exceed their expectations and provide unexpected amounts of value at every stage in the sales process.
#4: Don’t force customers through your funnel
Want to increase customer retention? Then avoid forcing your customer’s hand.
It is important to be visible, to be helpful, to be present, and to make sure they know how you can best serve them. But don’t try to pressure them into buying before they are ready.
Sure, you may get a few more sales in the short-term if you push people to purchase. But twisting a customer’s arm or nagging them to buy is no way to begin a long-term relationship. You are in this relationship for the long haul, right?
- Court each customer to retain them long-term.
- Think of the relationship like dating. You wouldn’t propose to someone on the first date, would you? So why attempt to convert a prospect into a customer when they’ve only just discovered your brand?
- Let your sales funnel unfold naturally, and let the customer set the pace.
Patiently develop these three factors: know, like and trust. Once this is established, prospects will invest in your services at the appropriate time.
#5: Do whatever it takes to fix a mistake
The order didn’t ship. The soup came out cold. The reservation was lost. The paint color was wrong.
We all make mistakes.
When you fail to delight your customer, you have an incredible opportunity to earn a customer for life.
It may sound strange, but making a mistake can actually be more effective when it comes to building long-term customer loyalty. Customers are much more likely to remember negative experiences than positive ones, and they’re much more likely to share those negative experiences with friends and social networks. 
This means if you make a mistake, but fix it promptly and exceed the customer’s expectations, they are likely to tell others about the experience.
In the event of an error, correct the matter by:
- Issuing the full refund
- Investing in coupons and freebies
- Giving free membership for a month, or
- Doing whatever it takes to make your customer happy.
The cost of retaining that customer is far less than the cost of a new customer acquisition – especially if the unhappy customer damages your reputation online or in the community. This warrants a third mention: do WHATEVER IT TAKES to make your customer happy.
#6: Reward customer loyalty
Positive reinforcement is a staple of psychology because it works. Reward your customers for loyalty to your company in a way that shows you understand them, and observe as customer retention soars.
Instead of developing buy-one-get-one offers or a typical loyalty rewards program, ask your customers what kind of loyalty program they would value most.
- Maybe they don’t care about earning points, but would love a ‘refer a friend’ program.
- Maybe they will happily refer friends for free if it means VIP purchasing status on your most expensive products.
- Maybe they’d love to provide input on new products that are currently in development.
Incorporate their feedback and ideas, and develop rewards that will improve the customer experience.
#7: Make regular customers your top priority
So often in small business, you’re focused on landing that new client, scoring the next account, or launching the new product.
With so much going on, and so much pressure to grow, it can be easy to neglect your loyal customers.
If you abandon your regular customers in favor of what’s new and exciting, you risk losing the stable core of your business. Customer retention is a sign of your overall business health. Regular and repeat customers should be treated like the VIPs they are.
- Make sure existing customer outreach is built into your sales funnel and your marketing strategy.
- Schedule routine follow-ups, phone calls, surveys, and giveaways for your repeat customers.
- Automate email outreach when it’s been a while since a customer has made a purchase.
You don’t need to constantly acquire new customers in order to experience small business success. By focusing on quality over quantity, it’s possible to increase your customer retention rates and build an unstoppable small business with the most loyal customers in your industry.
Originally published at Hoovers.com