So many small businesses focus on attracting new customers that they lose sight of what’s right in front of them: Their current customers. Nate Mell knows this well, as the owner of Felt+Fat, a tableware manufacturer in Philadelphia that’s well-known for its exquisite, handmade ceramic dishes.
The old saying goes that it costs five times as much to attract a new customer than it does to retain an old one. And while some people don’t completely subscribe to that notion, there’s no doubt that increasing customer loyalty is important for all small businesses.
In fact, Bain & Company research found that small businesses that can increase customer retention rates by 5% can increase their profits anywhere from 25% to a whopping 95%.
But, how can you increase customer loyalty while still focusing on attracting new customers? Felt and Fat points out four ways to do so.
1. Create an Outstanding Customer Experience
Customer experience (or CX) is all the buzz in marketing today. Small businesses can no longer think of CX in terms of just customer service.
In other words, servicing the customer can’t just involve solving a problem or answering a question when they have one. It needs to be a proactive plan that wows them from the start.
Of those companies that provide a customer experience that are above average, 73% do better financially than the competition, according to research.
One great way to do this is to provide chatbots to your website and social media channels. This provides customers with help around the clock, and lets them fix most problems, and answer most questions, on their own.
2. Build Engagement
Consumers want to engage with brands today. They don’t just want to buy a product and be done with it. That’s why you see so many brands focusing on the lifestyle behind their products and services.
Felt+Fat suggests connecting with customers on social media through topics that are related to your brand. If you run a pet grooming business, for example, post cute photos of puppies on your page, and encourage your followers to do the same.
3. Get Feedback, and Act on It
One great way to build engagement is to actively ask for feedback on your company. Your customers can provide you valuable information on ways that you can improve your business to attract, and retain, more customers.
Gaining feedback is only the first step of this process, though. Act on the feedback that is valuable, and then communicate the fact that you’ve done that to your customers.
4. Reward Customers
Customer loyalty programs have been around for years, and for good reason. They simply work.
Loyalty programs can take a variety of forms. The simplest is offering customers points every time they make a purchase. Then, when they earn enough points, they can cash them in for discounts.
You can get creative with this and also enter your loyalty rewards members into monthly contests where you give away products or exclusive access to something the general public doesn’t.
Felt+Fat is a tableware manufacturer in Philadelphia, well-known for exquisite, handmade ceramic dishes. Their customers include famous chefs like Eli Kulp, and their work has been featured in publications such as the Philadelphia Inquirer, Food&Wine, Bon Appetite, and The New York Times. Established in 2014, Felt+Fat has developed proprietary blends of porcelain and glazes to create elegant, durable tableware.
Fay Kadri graduated from Columbia University in 2005. Fay grew up in New Zealand but moved to the US after completing her school. Fay has written for several major publications including Buzz Feed and the Huffington Post. Fay is a community reporter, she also covers business and entrepreneurial news and issues.