Solidify Your Relationships

Shop It to Me is a free email service that notifies people when their favorite clothing items go on sale at boutiques and major retailers. The company wanted to find a way to improve customer retention by reducing unsubscribe rates. So as part of the unsubscribe process, CEO Charlie Graham added a step, giving customers the chance to cite their reasons for canceling. After making some changes based on what he learned — for example, adding maternity retailers — Graham saw his market share rise.

Numerous studies have shown it requires far more cost and effort to reach new customers than to keep the ones you have. In today’s tough economy, with consumers taking a hard look at every dime they spend, a customer retention program is more important than ever.

The recession presents some unique challenges to customer retention management. But the current climate also provides opportunity for businesses that know how and when to act. Here are four key customer retention strategies to help you keep your customers coming back:

1. Ask for feedback. Most dissatisfied customers will simply walk away from a business rather than make their displeasure known. That’s why it’s essential to be proactive about getting feedback. Madigan Pratt, whose Williamsburg, Va.–based customer relationship marketing firm Madigan Pratt & Associates works with hotels, suggests following up with customers to ask about their experience and invite them back. If they respond well, ask them to post a review on sites like Yelp or Angie’s List. “Send them an email with a link to make it easy for them,” Pratt adds.

2. Once you receive feedback, be sure to act on it. “When people feel like they’re being listened to, they’ll trust you more and be more engaged with your business,” says Debra Schmidt, author of Building Customer Loyalty from the Inside Out.

    

3. Expand your offerings. If you can expand your product or service line, you stand a better chance of continuing the relationship with customers who feel a need to tighten their budgets. Kate Zabriskie of Business Training Works in Port Tobacco, Md., provides this example: “Say you have a beauty salon. You can offer a mini treatment. Or if you’re a bakery that does high-end wedding cakes, consider a more affordable selection.”

4. If a customer has fallen by the wayside, consider offering a scaled-down service. “Your customers might not be able to afford your offering right now,” Schmidt says, “but you need to build bridges for when they do.”

I hope this helps you evaluate (or re-evaluate) your business relationships. If it has, let me know. Send me some feedback on what ideas you may have.

Best to you,

Jim Herrera

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