Back in 1981, Jim Lark wanted to let his customers know about the special "themed" dinners he and his wife, Mary, would be serving monthly at their exclusive restaurant, The Lark, in West Bloomfield, Michigan. He designed a newsletter to present each month's five-course gourmet dinner menu. The bulletin also offers tidbits of information about the couple's travels to Africa (and their chef's European trips) to search out new French dishes to prepare back home.
The friendly communiqué, which customers receive by filling out a patron card found at their table, did the trick. "The newsletter has filled reservations for our monthly themed dinners," Lark explains. In addition, the newsletter, also called "The Lark" and mailed to 1,140 customers, gives Lark an important link with his customers. "It creates a bond," he says. "I write it myself and treat it like a personal letter to a friend."
Lark, whose only other form of advertising is an occasional advertisement in a charity publication, credits his 16-year-old newsletter with helping to build a very loyal clientele. "About 85 percent of our business is repeat business," says the restaurateur. "I know the newsletter is working. There isn't a night that goes by that a patron doesn't tell me how much he enjoys reading it."
Customer newsletters are one of many proven methods entrepreneurs can use to keep in touch with existing customers and generate return business. Why cultivate a relationship with a customer once the sale is made? Studies show that it's four times more expensive and time-consuming to drum up new business than it is to nurture the customers you have. Besides, satisfied and happy customers do more than make repeat purchases: They're likely to tell others about your business, thereby generating potential revenues for you without any work or investment on your part. Here are six other sure-fire strategies you can use to keep your customers coming back for more:
1. Try punch cards. At the Brooklyn Coin Laundry in Brooklyn, Michigan, Jim Reiff's customers are given "Wash Cards" that contain 10 spaces on the front and a place for the customer's name and address on the back. Every time a customer uses the laundry facility, an attendant stamps his card. After 10 stamps, the customer receives a free wash and becomes eligible for a monthly drawing. The prize: five free washes.
The punch cards, Reiff believes, help generate repeat business. "People like to get something for nothing," says Reiff, who displays pictures of his monthly winners on a bulletin board at his laundry. "It doesn't cost me much to offer the program, just some free washes. And with so much competition in this business, I want to keep my customers coming here, rather than going to a competitor."
Punch cards are a natural promotion for a variety of retail and service businesses, including video-rental stores, car washes, shoe-repair stores, bagel shops and coffeehouses. "They're a good way to make your business different from your competitors'," Reiff adds. "For us, the cards are more effective than any other advertising we do."
2. Offer something special. If your business isn't set up to use a punch-card promotion, consider other customer freebies. If you sell office supplies, give away a new pen with a sizeable purchase. If you're in the cosmetics business, offer customers a free half-hour beauty consultation when they buy $50 worth of skin-care products. If you run a restaurant, give away a glass of wine or bottle of mineral water when diners place an order for a new menu item.
3. Stay in touch. Besides a newsletter, there are several ways to maintain contact with your customers. Send a written thank-you note expressing appreciation for their business. Remember them with a holiday or birthday card. Depending on your type of business, you might call key customers to see how they're doing. You don't need to sell anything; the next time they need your product or service, they'll remember you.
If you sell retail, why not invite past and present customers to a special pre-sale event? It's a great way to give them an exclusive, first-hand look at sale merchandise and, at the same time, say "thank you" for their patronage. That's what Noel Charonet, owner of Sierra Nordic, a ski-equipment store near Lake Tahoe, California, does at his annual Labor Day weekend cross-country-ski sale. Who gets first notice of his one-time discounted prices on new cross-country skis and equipment? The regular customers on his mailing list.
4. Nurture your referrals. Referrals are probably the most powerful way to develop a solid client base for your small business. "Referred customers require less selling time and are more loyal than other customers," says Jill Griffin, author of Customer Loyalty: How to Earn It, How to Keep It (Jossey-Bass, $23, 800-956-7739). "They come ready to buy because, in effect, they have already been sold."
The best way to generate referrals, Griffin says, is to give your customers "something to talk about" so they'll have reason to tell their friends and business associates about your business. That "something" could be a product guarantee, a service warranty, a liberal replacement policy, highly trained and knowledgeable employees, or honest and competent service with a smile.
5. Ask why they left. Before you go after new prospects to replace lost customers, find out why a customer stopped doing business with you. Contacting them might not win the person back, but you could gain important insights into how you can improve your customer service, billing procedures, or the way your receptionist answers the phone and takes messages.
6. Give top-notch customer service. Cliff Miller and Karen Carson operate Boulevard Coffee Roasting Co. in Carmichael, California, a $1 million-a-year-plus coffeehouse and roasting operation. Boulevard Coffee is well-known for its high brewing standards and ambient coffeehouse setting, with its cherrywood display counters and antique tables and chairs. Still, it's how employees relate to them that keeps the customers returning time and again.
The staff greets customers by name, recalls their favorite coffee orders, and explains the best ways to brew a diverse selection of coffees and teas at home. "The environment here is easy and comfortable. We want our customers to feel at home," says Miller. "Besides a good cup of coffee, we believe excellent customer service will keep our customers coming back."