One of the most common mistakes small-business owners make is to focus so much time on attracting new customers that they skimp on the effort it takes to create loyal customers. That's a mistake, of course, because it's more expensive to get new customers than to retain them. To develop and nurture a relationship with your customers, you have to communicate regularly and, above all, provide consistently over-the-top service.
Here's a look at how three small businesses are keeping the customers they worked so hard to attract:
1. Make a personal connection.
The Betty Brigade, an Ann Arbor, Mich.-based design firm founded in 2003, keeps track of important dates in its clients' lives and reaches out to mark each occasion by using Benchmarkemail.com, a low-cost online service. Through the service, company owner Sharon McRill can send automatic emails to some 400 customers at any time, whether it's to wish them a happy birthday, congratulate an anniversary or simply thank them for their loyalty. The service offers templates for the emails, and McRill just provides the email address and the client's name. "This keeps our company in the customers' minds in a positive way," she says.
Why it works: Everyone wants to feel special. "People have a basic human need to be acknowledged and recognized," says Kevin Stirtz, Minneapolis, Minn. based business consultant, who runs a website focused on customer service. He says these specific types of personalized emails show customers you care -- even when you're not trying to sell them something.
2. Be transparent.
What better way to ensure you'll be happy with a product than watching the creators build it in real time? KMGI, a New York-based producer of TV-style ads for the Web, almost doubled its business from existing clients in 2011 by allowing them to monitor the ad design work in real time. The 74-employee company allows customers to see which project tasks are completed, and gauge the cost for the day, week, and month. Company owner Alex Konanykhin says the process helps create transparency and trust -- two key ingredients for retaining customers. Clients also stopped calling the company to ask about the status of their projects. "Their calls used to eat much of our time," he says.
Why it works: Customers want to feel involved with the whole project, not just the beginning and end. "One of the big issues a customer has is that there's too much away time — too much time where the customer feels they don't know what's going on," Stirtz says. Allowing customers to offer feedback on your project or product throughout the process enables you to catch and resolve problems early on.
3. Customize mobile deals.
Dan Epstein turned to technology to keep customers coming back to Eppie's, his restaurant in Charlottesville, Va. He uses Cardagin, a mobile loyalty and customer retention program, to send special offers to customers on their smartphones and reward them with loyalty points. The program fee is $100 per month. Say you have customers who are daily visitors to your store, but they haven't been in for a few days? Epstein can send a personalized deal to woo them back, like a special on their favorite product or a free item upon returning. "Smartphones are so powerful these days that we didn't even consider something like a paper punch card," says Epstein, who opened the restaurant in 2006 and now has 15 people on staff. "Going mobile sets us apart, and helps us keep our customers engaged."
Why it works: "What I really like about that is they're not just sending out a blasted, mass message," Stirtz says. "Knowing the customer's order by heart and using that knowledge to your advantage is smart." Sending a customized deal also shows you're invested in the client and that you know what your customer wants.
Daniel Bortz is a freelance writer based in Washington, D.C. He's written about personal finance, careers, small business and entrepreneurs for publications such as Money magazine, CNNMoney.com, TheFiscalTimes.com, USnews.com.