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5 Tips to Improve Customer Retention Rates

By August 29, 2016 Customer Appreciation

Studies show that it costs small to mid-sized businesses (SMBs) 4-10x more to acquire a new customer than it does to retain an existing customer. Existing customers are easier to market, require less service, and have already expressed interest in the company’s brand.

Unfortunately, though, many SMBs struggle with low customer retention rates. If this sounds familiar, check out the following tips to discourage customers from leaving your business and choosing one of your competitors.

Send Happy Birthday Messages

Who doesn’t enjoy a seeing a “happy birthday” message in their mailbox? Whether it’s direct mail or email, you can improve your business’s customer retention rates by sending happy birthday messages. You don’t have to create some highly detailed message, as simple messages often work best. Just make a note of your customers’ birthdays and send wishes when that day rolls around. Customers will appreciate this gesture, increasing your business’s retention rates and overall customer/client satisfaction.

Use a Loyalty Program

In addition to sending happy birthday messages, you can also improve customer retention rates by using a loyalty program. From Best Buy’s “Zone Rewards” to Target’s “REDcard,” thousands of businesses use this strategy to retain customers.

You can follow a similar approach with your business, offering some type of incentive for customers to buy your products and services in the future. For instance, offer customers 1 point for every dollar they spend (or any fixed amount). After customers have accumulated enough points, they can redeem for various gifts, discounts or other perks.

Find Out Why Customers are Leaving

There’s no better way for a business to improve its customer retention rates than to find out why customers are leaving in the first place. Try sending customers a satisfaction survey once every few months, asking them to rate their level of satisfaction with your business and its respective products and/or services. With this information in hand, you can make changes to your business so customers are more likely to stay.

Here are some sample questions to use in your satisfaction surveys:

  • On a scale of 1-10, how likely are you to recommend our business to a friend or family member?
  • On a scale of 1-10, how satisfied are you with [insert product name here]?
  • On a scale of 1-10, how fast was the [insert product name here] delivered?
  • On a scale of 1-10, how likely are you to buy another product from us in the future?
  • Is there anything else we can do improve your shopping experience?

Give Customers a Gift

Of course, you can retain more customers by giving them a gift. Doing so shows that you appreciate their business — and it’s the little things like this that really leave a lasting impression. Regardless of your business’s industry/niche, gifts make an excellent, cost-effective solution to improve customer retention rates.

But don’t just give any gift. Instead, give your customers some type of branded gift so they’ll remember from who it came (your business). A branded coffee mug or box of cookies from UdeserveACookie! is an excellent choice. It’s no secret that most people love cookies and coffee, making gifts such as this perfect.

Offer ‘Come Back’ Discounts to Inactive Customers

If a customer hasn’t made a purchase in a while, there’s a chance that he or she may leave your business for good. You can try convincing them to return, however, by offering a “come back to us” discount or promotion. After a prolonged length of inactivity, for instance, send customers a promotional message offering something like 10 or 20% off their next order. Incentives such as this can turn dormant customers active again. And once they are active, customers may stick with your business.

If you’re a small business owner who wants to improve their customer retention rates, contact us today. UdeserveACookie! specializes in gourmet cookie gift boxes, coffee mugs and more. Show your customers you care by giving them one of our signature gifts.

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