Why Small-Scale Business Needs To Focus On Customer Retention
Customer Retention is something that defines the value of your business. It is as important as customer acquisition. Improving customer retention helps in strengthening the reputation of your business. Also, it builds a sense of trust amongst the customers. Here’s the proof, 84% of the people are likely to get influenced by the recommendations of family and friends rather than getting influenced by the advertisements.
The primary key to retain customers is to provide the best services and product quality so that they never leave you. For instance; Why a customer comes to you for any beauty treatment though there are branded salons nearby his locality? Something unique and of their interest you may be offering. We can also take the example of Amazon. Amazon started with bookselling and earned trust by offering the best services. Gradually, it expanded and filled its store’s shelves with electronic appliances, apparels, footwear, accessories, you name and you get. Do you know what, Amazon’s entire focus is on customer acquisition and retention. This gigantic company has left no stone unturned to create a huge impact on customers and entice their purchasing power. This is where Amazon created a big difference.
In this blog we will explore why customer retention is the key to success for small businesses and some tactics to retain the customers.
Customer loyalty relates to the behaviour of customer over specific brands. For instance; if a customer is inclined to shop from United Colors of Benetton, he won’t look for any other brand. To analyse which brand suits their lifestyle, customers look into various parameters such as style, collection, quality, customer service and the comfort it gives. The emotions that get attached with a brand results in the positive experience encouraging a customer to stay with it for long. Nowadays, small businesses are succeeding in building a sense of trust amongst the customers through loyalty initiatives which combines product quality, excellent services and good experience.
Why customer loyalty is the key to create the competitive edge?
With every single day passes by we come across a new business cropping up. And, yes, the competition is not the same as it was earlier. It is fierce and to be honest, things are becoming tough for the small business owners. Customers have various options to explore and quench their demands. If you fail at some point, the chances of customers switching over to your competitor increases.
A company’s success is measured by its capabilities of meeting the demands of customers. Why would a customer continue to stay loyal with the same brand? You would definitely agree that customers create a brand and not the company. In the early days customers used to scrutinize a company with distinct parameters as mentioned above. The quality and the comfort were amongst these that made or break the business but today, loyalty programs are assisting in uplifting the business growth and performance.
Advantages of Loyalty Programs for Small Businesses
→ Reduces the Acquisition Cost: Counting on your existing customers’ demand and satisfying their needs costs less compared to doing the same for new customers. New customers are unaware of the quality and services you provide. Besides, it can time to build a trust amongst the new customers. When you focus on your existing customers’ needs you are automatically creating a rapport with them and developing a sense of trust on them. This in turn may result in increase in recommendations and word-of-mouth marketing.
→ Maximum ROI: According to the statistical report, repeat customers are likely to purchase 9 times compared to first-time shoppers. Besides this, repeat customers purchase nearly 30% more items per order compared to first-time shoppers. For instance; there is a famous shopping center in Ahmedabad, National Handloom Corporation. Few years back when it was just started, users used to visit it to check out the items on shelf and make a casual purchase but today, it has become one of the biggest shopping hub of Ahmedabad. The quality products it has in its shelf plus the services it provides gives users exceptional experience which entice users to shop from there often. Not only weekends, you will notice the same crowd during the weekdays. Imagine its per day sales and profit? It’s unimaginable.
→ Increase in the number of customers: This point is in the continuation of the above. Whenever you ask the users the best shopping destination in Ahmedabad. Definitely, National Handloom Corporation will be in the top list. This shopping hub has everything on its shelf from apparels, footwear, accessories, home decoration items, cutlery, to groceries that too at nominal price compared to market price. Offering everything what a customer needs on a regular basis, this shopping center succeeded in driving more customers just by making its existing customers happy and satisfied.
→ Valuable Insights: Do you think it is a rocket science to analyze users’ buying journey? It is indeed not. Once you visualize what they are searching for you get a clear idea of what to shelf. A strong view of your customer demands helps you in product innovation and promotion.
→ Competitive Edge: When do you create competitive edge for your business? Simply follow the golden rule – value your customers and their demands and you win. Your customers are the biggest weapon to help you stand out of the crowd and achieve the status. For instance; Why Amazon is #1 online shopping store? As said above, consumers are its topmost priority. The business revolves around customers’ demand, and their interest. That’s the reason, we see that Amazon Kindle, Amazon App Store, Amazon Prime Video, Amazon Music are in use to a greater extent. Amazon Kindle and Amazon Prime Video are the two products almost everyone may be using with the subscription. This is where Amazon has created a competitive curve leaving its competitors behind.
Agreed! The competition is fierce and customer retention is not an easy job. Besides, there is a myriad of brands and products rolling out in the market influencing users’ purchasing power. But the business that focuses on demands and requirements and try to fulfill them surely wins the game.