Hold On to Existing Customers Afraid that customers will forget about your business? Periodic newsletters help you stay in touch.
Q: Iown and operate a successful retail business. I've found iteasy to attract new customers, but while these new customerscontribute to my business's growth, I find that a number of myexisting customers leave for one reason or another, sometimes forno apparent reason at all. This makes me feel like it's"two steps forward, one step back," thereby severelylimiting my business's net growth. How can I do a better job ofholding on to existing customers?
A:It's absolutely essential to the success of your business thatyou keep your existing customer base intact while you take time tofind new customers.
If you appear to ignore your business's customers, they willbe more likely to become influenced by the marketing efforts ofwould-be competitors and switch their loyalties to anotherbusiness. And as you have experienced, this loss of customers tendsto 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 customersdirectly and on a regular basis. As a marketing tool, a properlydesigned newsletter will contain information that is important tocustomers--things to which they wouldn't ordinarily becomeexposed that are nonetheless of more importance than just passinginterest. When your customers hear from your business, they'reless susceptible to your competitors' marketing efforts. Bystaying in communication with your customers, you are sending amessage to them that they are indeed important to your business.This attention alone can make the difference between a loyalcustomer who stays with your business and one that feels neglectedand ultimately decides to leave.
A newsletter should provide more than just news about yourbusiness. Although information such as changes in staff or productlines may be of interest to your customers, a newsletter allowsyour business to market in an entirely new fashion. Yourbusiness's newsletter can be an important marketing tool thatnot only encourages your existing customers to stay on ascustomers, but also motivates them to buy more of what theycurrently buy and/or to consider buying products that theyhaven't purchased to date. These additional sales (or"plus sales" as they're called) represent a realgrowth opportunity for your business.
There are many decisions that precede the actual publishing of abusiness newsletter, including: format of the layout, size andcolor, frequency of issue, the proper mix of information and salespromotional materials, who will actually receive the newsletter,and the distribution methods(s) to be used to get the newsletterinto the hands of the right readers. In the past, newsletters havetraditionally been sent via direct mail or as a handout at yourplace of business. But with the growth of the Internet, bothbrick-and-mortar and e-businesses have been turning more frequentlyto e-mail as a cheaper and faster alternative.
Your goal should be to develop a strong following of customerswho enjoy your business's newsletter on a regular basis andwho, in return, remain loyal customers. By properly using anewsletter, your business can enjoy a greater degree of retentionin its existing customer base, while at the same time encouragingthem to buy more. This combination of retention and plus sales canmake a significant positive contribution to your business's netgrowth. You'll lose fewer customers while selling more to thosewho stay!
David Meier received an MBA in Finance from Loyola ofBaltimore, 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. Heis currently the founder and COO of Small Business 411, whichprovides small-business owners with ongoing business coaching andthe knowledge and support required to enable them to become trulysuccessful entrepreneurs. Visit the Small Business 411 site athttp://www.smallbusiness411.com
The opinions expressed in this column are thoseof the author, not of Entrepreneur.com. All answers are intended tobe general in nature, without regard to specific geographical areasor circumstances, and should only be relied upon after consultingan appropriate expert, such as an attorney oraccountant.