Invest to Keep Them or Replace Them

Hi ,

Where do most business owners focus when it comes to growing their companies? Do they invest in acquiring new customers or retaining existing ones?

How about you? How much do you invest in your sales and advertising and how much in the service of your customers?

It’s a fact. Customer retention is the key to long-term business success. According to research, it costs five times more to acquire a new customer than it does to retain an existing one.

So retaining your customers and growing share of wallet is key to ultimately scaling and making your business a sellable asset.

What is a good strategy for keeping my customers and turning them into repeat buyers?

It’s obvious but start by offering exceptional customer service, personalize where you can, and encourage and reward their loyalty.

For example, I tried a mobile grooming service for my dog. When the appointment ended I asked about any loyalty or points program they had. There was none. The business was going about it the hard way.. advertise and get new customers constantly but don’t make any investment or effort in encouraging repeat business.

How do you effectively measure customer retention?

Well I’d say make your primary metric Customer Lifetime Value. I like this metric because it gives you a full picture and incorporates different metrics such as customer churn rate, repeat purchase rate, and average spend.

These metrics involve tracking how many customers leave your business over a particular period, how many customers return to make repeat purchases, the value of each customer over their lifetime with your business, and how satisfied customers are.

Analysing the trends in your customer lifetime value will tell you how well you are retaining and growing your customer base.

How can businesses re-engage lapsed customers and win them back?

Start with personalised offers, tailored communication, and customised solutions to address any previous issues or concerns. Making customers feel valued, appreciated, and worth more than walking ATM machines can encourage lapsed customers to return. And of course, there are always discounts or special promotions for loyal past customers that can incentivise them to return.

In short, Customers are not always right but they are your most important asset. Treat them as human beings and by the Golden Rule and you will go a long way to retaining and growing your customers without relying on expensive advertising.

To your success and sanity,

George

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