In an unstable economic climate, retaining customers is more cost-effective than gaining customers. RSM Bird Cameron offers 5 steps to ensure customer retention in your business.
Recent volatility in the economic climate and tighter scrutiny from banks have posed a number of challenges for businesses.
With the cash cycle tightening, some suppliers are putting customers on COD (Cash On Delivery) or purchase limits when ordering products.
In other instances, banks have requested more frequent financial reporting from clients for monitoring purposes, which has led to customers cutting down on their purchases in fear of being denied loans in the future. This in turn has eventuated in retailers having to work harder to gain and retain customers.
However, all is not bad on the horizon. Consumers are slowly starting to spend again, though they are still being cautious, especially following the GFC (Global Financial Crisis) during which job security was no longer a guarantee.
In light of this change, and the increase of customers buying online, businesses are advised to assess their current revenue streams and identify ways to ensure positive buying experiences. Differentiating from the online buying experience can be a key focus for traditional retailers in their strategy to woo consumers.
“[Business owners] need to move away from ‘survival mode’ to create a positive retail environment that takes full advantage of the fact that consumers are beginning to spend again, albeit slowly and cautiously,” said Andrew Graham, national head of business solutions, RSM Bird Cameron.
“[They] need to review their current revenue streams, identify ways to expand or change revenue streams and identify the client problem solved by providing their product or service in order to attract and retain customers and build customer loyalty.”
Creating a positive customer experience motivates the customer to come back. This is the easiest way to increase sales and the overall growth and profitability of your business.
“It can cost up to six times more to win a new customer than it does to have an existing customer purchase again. This is because you invested time and money to acquire that customer for the first sale but every additional sale after that involves very little cost,” said Graham.
“Increasing the number of times your customers buy from you is possibly the easiest way to increase sales, improve profit and grow your business.”
RSM Bird Cameron’s five tips to promote customer retention
1. Awareness and consideration
Be aware of what your customer is looking for and make sure this is what you are offering whenever you communicate with each customer and in every marketing initiative.
2. Select and buy
Streamline your purchasing process to ensure it is as simple as possible for customers to buy from you.
3. Initial experience
Prevent buyer’s remorse by actively engaging your customers after the initial buy. Inquire immediately about their level of satisfaction and provide information that reinforces the reason for their purchase.
4. Use, learn and support
Continue to nurture relationships with your customers at all times, including post-sale.
5. Repurchase and recommend
Engage your customers in future sales opportunities by encouraging them to recommend you. Act swiftly to correct errors or address complaints and offer an incentive for them to return.