Are you a John Lewis customer?
Do you somehow feel ‘reassured’ and ‘safe’ when you buy from them in store and online?
So what’s their secret?
Did you know that the average business loses around 20% of its customers annually simply buy daily to attend to customer relationships. In some sectors, leakage is as much as 80%. The cost in either case is high, yet few businesses understand the implication for long term profit and growth. Small changes in customer retention can multiply to give great results.
Here are 5 simple strategies that cost little to implement.
It’s probably highly likely the John Lewis Partnership implements variations of the ones listed below, in some way or other. (We’ll let you be the judge of that though!).
1. Reduce erosion
Virtually every business loses some customers but few ever measure or recognise how many of their customers become inactive. Ironically, most businesses invest a lot of time, effort and expense building that unique customer relationship then they let that relationship go unaffected. Om some case losing interest as soon as the sale has been made, only to spend another small fortune to replace that customer. It’s a no brainer really: the easiest way to grow your business is not to lose your customers.
Once you stop the leakage it’s often possible to double or triple growth rate because you are no longer forces to makeup lost ground to stand still.
2. Complaints are ‘gifts’
96% of dissatisfied customers don’t complain: they just walk away and you never know why. That’s because they often don’t know how to complain or can’t be bothered, or are too frightened, or don’t believe it will make a difference.
Whilst they may not tell you what’s wrong, they will certainly tell plenty of others! Unearthing complaints is the lifeblood of your business because a complaining customer is giving you a gift. They’re still talking to you giving you another opportunity to delight them. The way you respond gives you a chance to show them what you are made of and create even greater loyalty.
Don’t miss it!
3. Lifetime customer value
There’s a big difference between the one-off profit you make on an average sale and the TOTAL profit your average loyal customer represents over a lifetime of business with you.
Work out how much profit a loyal and repeat customer represents to your business over the months, years and decades. And you then realise the critical importance of taking good care of your customers!
And in due course, you’ll understand just how much time, effort and expense you can afford to invest in retaining that customer and you’ll be in control of your marketing expenditure.
4. Sell, then sell again!
Many businesses do a great job making that initial sale but then they drop the ball and get complacent, ignoring the customer while they go and chase more business.
Your selling has only begun when someone makes that initial purchase decision because virtually everyone is subject to ‘buyer’s remorse’.
To lock in that sale and all the referrals and repeat business that will flow from it, you need to quickly allay your customers’ fears and demonstrate by your actions that you really care. Thank them and remind them why they’ve made the right decision to deal with you. And put a system in place to sell to them again and again, so constantly proving they made the right decision.
5. Bring back ‘lost sheep’
There’s little point in dedicating huge resources into generating new customers when 25-60% of your dormant customers will be receptive to your attempts to regenerate their business – if you approach them the right way, with the right offer.
Reactivating customers who already know you and your product is one of the quickest ways to increase your sales. Re-contact them and remind them of your existence. Find out what they are no longer buying from you and show that you still value and respect them.
This usually results in tremendous sales opportunities and increased revenues in a matter of a few days.
So the next time you're in Peter Jones or John Lewis, check out how the staff deal with you. I reckon they will tick all the above five tips. Let me know!