Hold On to Existing Customers
Q: I own and operate a successful retail business. I've found it easy to attract new customers, but while these new customers contribute to my business's growth, I find that a number of my existing customers leave for one reason or another, sometimes for no apparent reason at all. This makes me feel like it's "two steps forward, one step back," thereby severely limiting my business's net growth. How can I do a better job of holding on to existing customers?
A: It's absolutely essential to the success of your business that you keep your existing customer base intact while you take time to find new customers.
If you appear to ignore your business's customers, they will be more likely to become influenced by the marketing efforts of would-be competitors and switch their loyalties to another business. And as you have experienced, this loss of customers tends to come without warning, and by the time you know they're gone, it's typically too late to do anything about their leaving.
A newsletter allows your business to communicate with customers directly and on a regular basis. As a marketing tool, a properly designed newsletter will contain information that is important to customers--things to which they wouldn't ordinarily become exposed that are nonetheless of more importance than just passing interest. When your customers hear from your business, they're less susceptible to your competitors' marketing efforts. By staying in communication with your customers, you are sending a message to them that they are indeed important to your business. This attention alone can make the difference between a loyal customer who stays with your business and one that feels neglected and ultimately decides to leave.
A newsletter should provide more than just news about your business. Although information such as changes in staff or product lines may be of interest to your customers, a newsletter allows your business to market in an entirely new fashion. Your business's newsletter can be an important marketing tool that not only encourages your existing customers to stay on as customers, but also motivates them to buy more of what they currently buy and/or to consider buying products that they haven't purchased to date. These additional sales (or "plus sales" as they're called) represent a real growth opportunity for your business.
There are many decisions that precede the actual publishing of a business newsletter, including: format of the layout, size and color, frequency of issue, the proper mix of information and sales promotional materials, who will actually receive the newsletter, and the distribution methods(s) to be used to get the newsletter into the hands of the right readers. In the past, newsletters have traditionally been sent via direct mail or as a handout at your place of business. But with the growth of the Internet, both brick-and-mortar and e-businesses have been turning more frequently to e-mail as a cheaper and faster alternative.
Your goal should be to develop a strong following of customers who enjoy your business's newsletter on a regular basis and who, in return, remain loyal customers. By properly using a newsletter, your business can enjoy a greater degree of retention in its existing customer base, while at the same time encouraging them to buy more. This combination of retention and plus sales can make a significant positive contribution to your business's net growth. You'll lose fewer customers while selling more to those who stay!
David Meier received an MBA in Finance from Loyola of Baltimore, and spent much of the 1970s teaching business courses; later, he created a consulting group, and for the next two decades, provided accounting and tax services to small-business owners. He is currently the founder and COO of Small Business 411, which provides small-business owners with ongoing business coaching and the knowledge and support required to enable them to become truly successful entrepreneurs. Visit the Small Business 411 site at http://www.smallbusiness411.com
The opinions expressed in this column are those of the author, not of Entrepreneur.com. All answers are intended to be general in nature, without regard to specific geographical areas or circumstances, and should only be relied upon after consulting an appropriate expert, such as an attorney or accountant.