Small business: Customer loyalty, retention

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Companies need to look for new and better

Companies need to look for new and better ways to reward customer loyalty, experts say. Photo Credit: iStock

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Jamie Herzlich Newsday columnist Jamie Herzlich

Herzlich writes the Small Business column in Newsday.

In this competitive marketplace, it's critical for companies to look for new and better ways to boost customer retention and loyalty.

Too often, companies take for granted that their customers will keep returning.

With the new year approaching, businesses should evaluate all aspects of their customer interaction to find customer-service flaws and improve the overall customer experience, experts say.

"The new year is a good time to review the relationships you have with your customers and look for opportunities to strengthen those relationships," said Randi Busse, co-author of Turning Rants Into Raves (The Rant and Rave Co. Inc.; $18.95) and president of Workforce Development Group, an Amityville-based customer-service training organization.

Here are some ideas:

Analyze the customer experience. Take a walk in your customers' shoes and review all customer touchpoints to gauge their experiences, Busse said. This should include evaluating your website, phone interaction, ease of placing an order, making a return, etc., she said.

Reward existing customers. Too often, companies are so busy trying to win new customers they ignore existing ones, Busse said. Offer a promotion or special to existing customers, thanking them for their continued patronage, she said.

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Consider a loyalty program. Offer an incentive to returning customers. This has worked well for Lessing's, which owns seven restaurants on Long Island, including the Post Office Cafe in Babylon, Library Cafe in Farmingdale and Finnegan's in Huntington. Customers are given a rewards card that's swiped when they pay and accumulates points. For every $200 they spend on food, they get $20 back toward future food purchases, said Jennifer Cantin, Lessing's director of training and development. Since the program started in 2007, 34,000 customers have signed up, she said.

Increase customer feedback. "Customer feedback is the holy grail for improving customer experience," said Jill Griffin, president of Austin, Texas-based, a customer loyalty consultancy and author of "Customer Loyalty: How to Earn It, How to Keep It" (Jossey-Bass; $22.95). Gathering feedback could be as simple as asking a customer at checkout, "What is the one thing we could have done better today to improve your customer experience?" she said.

Identify top customers. Every company should know who the 20 percent of their customer base is that is driving 80 percent of its sales revenue, said Griffin. They then need to be providing extra value to that 20 percent and making sure they're insulating them from "competitive attack," she said. This could be through special VIP offers, thank-yous or other methods.

Educate and reward employees. Teach employees about the importance and basics of winning and keeping customers, said Michael LeBoeuf, the Paradise Valley, Ariz.-based author of "How To Win Customers and Keep Them For Life" (Berkley Trade; $15). Reward those employees who reward the customer, he said. For instance, he points to a tire store chain in Minnesota where the owner told each store, "For every week that your store gets no customer complaints, I'll pay everyone $1 an hour more a week for that week," LeBoeuf said. Each customer was given a customer-feedback card to fill out and mail back to the owner, he said; customer complaints decreased more than 75 percent.

Identify and manage 'moments of truth.' LeBoeuf calls every contact a business makes with a customer or potential customer a "moment of truth," be it in person, online or via telephone. After each contact, that person will come away feeling better, worse or the same about the business, he said. The goal of every business should be to create as many positive moments of truth as possible.




Don't write off lost customers



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You have a 20 percent to 40 percent chance of successfully selling to a lost customer, while you only have a 5 percent to 10 percent chance of making a successful sale to a prospect.

Source: Customer Winback/Marketing Metrics

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