Connecting decision makers to a dynamic network of information, people and ideas, Bloomberg quickly and accurately delivers business and financial information, news and insight around the world.
+1 212 318 2000
Europe, Middle East, & Africa
+44 20 7330 7500
+65 6212 1000
It’s a maxim of marketing: Retaining a current customer is easier, wiser, and less costly than attracting a new one. Your loyal customers are the most important—with "loyalty" defined by the length of buyers’ relationships with your company, the volume of products they purchase, or other transactional metrics.
When you cultivate relationships with your most valued customers, you enhance the value of those relationships. The customers will buy more product—and buy more frequently. Most importantly, they will recommend your products and services to friends and family via traditional "word of mouth" or "word of mouse" and spread the word through social media and other forms of digital communications.
There are four imperatives for cultivating existing customers:
1. Find out and know who they are. Web-based systems, point-of-sale systems, and call centers allow you to measure metrics that help characterize who your most important buyers are. Determine the customer-related data that are right for your business. Collect and track that data regularly.
2. Personalize promotions. Customers today expect to receive customized offers. By customizing promotional offers—pricing, new products, bundled offerings—you showcase your knowledge of those customers while strengthening the bond you have with them in the process.
3. Give the best customer service. Keep in constant contact with customers. Check on how well you are servicing them. Assess how they like the products they’re buying and the service they’re receiving. Always be cordial and as accommodating as possible.
4. Don’t always be selling. This is related to my previous point. Not every customer communication should be sales-oriented. Periodically reach out with nonpromotional messages—those that show you value the buyer’s loyalty. The classic example: sending a birthday or anniversary greeting to say congratulations. Or, as is done in the restaurant industry, offer a free entrée or dessert. (Naturally, the better information you have on your customers—see point No. 1—the greater insight you’ll have for creating these types of nonpromotional messages.)
Want to improve the way you run your business? Entrepreneurs, academics, and consultants from diverse industries offer practical advice on a variety of topics each business day.
To submit a tip for consideration, first check our archive of previous tips to make sure you're not repeating a tip someone has already contributed. Then send the tip to Small Business channel contributor Michelle Dammon Loyalka. Because of the volume of material she receives, she may not respond to each individual.