New Clients are Great, but Loyal Customers are Your Bread and Butter
The old adage says that it cost 5 times more to acquire a new customer than to retain an existing one.
So then the idea would be to focus on customer loyalty to ensure that your clients keep on coming back to you again and again. While this may seem like a stellar business plan, you have to keep in mind that without new customers you will never grow, and the goal of any business would be to grow and thrive. Replacing old clients with new on a regular basis to maintain a state of operations, as well as growing your client database.
So it seems as though this would be like running in place on a treadmill. You never really get anywhere. Clients are loyal until they move, or decide to see if they can lower their bills, and get a better deal with the new company that is slashing prices in order to gain clients quickly. So you have to replace them with new clients in order to succeed.
In order to determine your cost to acquire a new customer, you have to take a look at several factors. No two customers will cost the same amount to acquire. For a more detailed look at determining your cost, this article from Entrepreneur really gets to the nitty-gritty: How Much Did That New Customer Cost You? You have to look at many factors ranging from how did the customer find you, to how long it took you to book them. Tracking these numbers can be a real eye opener. It can also help you to better understand where your marketing dollars are best spent.
That being said, we all know that the adage of the cost of acquisition for a new client will always be more than creating a loyal base of repeat customers. So here are a few reasons why retaining your customers is so important:
- A loyal customer is more likely to refer you to family and friends.
- The majority of small businesses report that they majority of their monthly business comes from recurring customers.
- A loyal customer is more likely to leave a positive review for your company on an online forum, or comment on social media.
- The lifetime value (LTV) of a repeat customer will far exceed the value of a one-time customer.
So from my experience here are some of the sure-fire ways to ensure that you not only turn your new clients into loyal clients, but that you also have a high level of customer retention in the long term.
- Keep your client database updated, and detailed. The more your know about a client the better you can serve them.
- Use regular email updates and social media to stay in touch so they you are always the first business they think of to meet their needs.
- Actively market services based on the season which it be time for a deep spring cleaning, or an HVAC tune-up before winter or summer.
- Always handle customer complaints with respect, and ensure that all complaints are made right in a timely fashion.
- Ask your clients for their feedback so that they have a voice, take the positive as well as the negative to see where you need to work and improve.
- Customer Service should always be a priority from the first point of contact to 10 years down the road.
- Be sure that your entire team knows their role in customer service because as will any small business, customer service is everyone’s job.
You can increase your monthly revenues by actively working to build relationships with your existing clients as well as your new clients. Consider not only what your client needs today but what they will need into the future. Always keeping in mind the lifetime value of the client.