Part III: Retaining Customers
This is the third and final post in the series titled ‘Experiments in Sales’.
One of the biggest contributors to the sustainability of a business is whether or not customers are coming back to consume the product or service. Whether you are a Kirana store or a salon or a printing supplies business, the fact that customers like the service you provide and come back for it has a number of advantages for you as a business. I am listing a few below to further substantiate how important repeat customers are:
- Increased revenue at less effort and cost: For repeat customers, you do not need to spend on marketing your products or showing them how to use them. They already know and like your product which is why they are buying it again.
- Genuine feedback on products and services: Repeat customers are invested in your success and want to consume what you sell. Hence they will be more honest than others and will tell you what’s good about your product and what needs to improve.
- Assured revenue during difficult times: The recent COVID pandemic substantiates this point very well – at times when new customers are difficult to acquire, a set of regular customers can really help keep the business afloat.
- Easier to upsell and cross-sell: When someone has already bought from you and has liked your product, it is relatively easy to encourage them to buy more. When they have enjoyed their haircuts regularly at your salon, it is possible that they might buy that new conditioner from you or try a manicure next time.
- Word of mouth promotion: Loyal customers always tend to talk actively and very favorably about their experience with your product. If they liked the woodwork done by their carpenter, they will most likely tell everyone in their building and even invite people over to take a look which is free publicity for the carpenter which usually means more orders.
These are just a few points I have listed out, but I would urge you to think about repeat customers from the point of view of your business – who are your repeat customers? In how many different ways they have impacted your business?
Now that we know why it is important to have repeat customers, we can discuss how to make this happen – how can we ensure that once a customer has bought stationery from me or eaten at my restaurant, they keep coming back?
I will share some methods that I have seen work all the time. Some of these are things large businesses do which can also be adopted by small businesses. In many of the below points, I am actually documenting all the small yet special things that all of you already do as small businesses 😊
- Focus on on-boarding the customer well: Part II of ‘EXPERIMENTS IN SALES’ discusses customer on-boarding in detail. If a customer is on boarded well, he is less likely to want to go elsewhere to experience the same product. Please look up the previous post for some of my thoughts on customer on-boarding, why it is important, and how small businesses can do it successfully.
- Identify your experience USP: Most of us have experienced something special at our local barbershop when we take our children there for a haircut - The barber always gives a small sweet or chocolate to the child. Similarly, we probably visit a particular clothing store because it has well-lit changing rooms. Beyond the product itself, there is always a special reason we go back to a particular business. All small businesses should be aware of their own experience USP and ensure this is not altered. E.g. if the sambar is the reason people come back to a south Indian restaurant, the chef must ensure that he doesn’t change this particular recipe even if he is making other changes to the menu. What the customers find special will be the reason they continue to give you more business so this must be identified and maintained.
- Avoid offering excessive freebies or discounts initially: If what you have is a good quality product, then discounts and offers certainly help to get more people to try a product for the first time. However, if we give too many discounts, in the beginning, we may be setting the wrong expectation for the customer who will expect a discount every single time. So many customers who came in the first time may not come again or the business owner may be stuck in a situation where he has to continue giving discounts to attract customers – this vicious circle may lead to an overall loss of business. A good way to avoid this disappointment is to be aware when we project our business that only an ‘x’ percentage of the first-time customers (and not all of them) will be repeat buyers. Another way is to keep discounts and offers extremely rare and not too frequent.
Another recommendation is to in fact give discounts and offers to repeat customers in addition to the new customers. Many businesses don’t realize that they can do this and instead focus the special offers only on new customers. but when we delight a customer who already likes your product with a gift or discount or a special membership etc., he is doubly encouraged to keep coming back.
- Maintain consistent relationships with the customers: Relationships are the number one reason why customers sometimes choose small Kirana stores over large format retailers or local eating joints over franchisee outlets at malls. When we have interacted with the store owner several times, personal comfort and trust grow with these interactions which is difficult to replicate for large businesses. However, not everyone in the store may be capable of creating the same level of trust. This is why many times when the ownership changes at a store or if our favorite salesperson quits, we stop going to the store. One-person dependency must be avoided by small businesses as it can also be very stressful for the owner.
Like large organizations, small business owners must also encourage training among their staff members to ensure that everyone is able to generate the same level of trust with the customer. This training can start with a simple session once a week with the team where everyone discusses their best customer interaction moments so that the others can understand and adopt these.
- Find ways to stay in touch with your customers: This is something medium and large businesses do well. They usually take details like phone numbers and email at the time of billing and continue to keep the customer informed of upcoming products, offers, etc. Most small businesses will not have a challenge in collecting customers’ phone numbers or email addresses because of the trust factor already created. Yet very few small businesses use this database to their advantage. Our local carpenter has our phone numbers but we rarely hear from him on a new cupboard he built or the first time he actually designed a door for a customer. Customers would be happy to know about what else the carpenter can do so that they will be aware the next time they need some woodwork done. Small businesses must identify ways to stay in touch with their customers – keep them informed about new projects, take feedback about a new product they want to launch. Care must also be taken to ensure the communication is not too frequent or irrelevant to the customer. For e.g. even if you are sending a festival greeting, if this is accompanied by an update from your end on a new product launch or special offer, it will be more relevant to the customer than just the seasons’ greetings.
These are some interesting ways in which small businesses can ensure their customers always keep coming back. It will be a really fun exercise for a small business to sit down with their team and come up with even more such ways in which they can keep their customers loyal.
This concludes the three-part blog series on my ‘EXPERIMENTS IN SALES’. I hope you have found these interesting and that the perspectives have helped you reflect on your own businesses and find new ideas and methods to experiment with. Thank you for reading!
Aparna Krishanan is a sales leader and advisor to small businesses and start-ups. Aparna has about 15 years of experience in sales, people management and start-up operations and has worked with MNCs and start-ups alike. She is passionate about planning and implementing new sales and business models and more importantly learning from these implementations to continuously improve. She believes learning is the most important element to focus on for an entrepreneur or professional rather than success and failure.