Healthy customer relationships are key to long-term business success. Instead of focusing entirely on new customers, it's important to look after your existing market by building valuable relationships that endure over time. Long-term viability demands both customer retention and customer acquisition, the only question is how to develop these relationships in alignment with your business goals.
According to Bain & Company, businesses who increase their customer retention rates by just 5% can benefit from a profit increase of between 25% and 95%. At Banjo, one of our main cultural drivers is to build deep, strong relationships with our customers. When 80%+ of our customers come back to us to reborrow, we know we’re doing something right.
Let's take a look at 7 effective ways to build stronger customer relationships, so you can reach your business potential.
1. Understand your customers
Taking the time to understand your customers is the first step towards business success. Not only do you need to constantly touch base with your customers via engagement surveys and online chats, it is also good every now and then to reach out and call them. The more understanding you have around your customers and their drivers the more ammunition you have to provide them the best service.
In addition to the individual information you garner, ongoing customer profiling and market research, can help you understand the needs of your customers and mould your processes to be the most effective to your audience. Information is key, and customer segmentation, marketing, and communication much more effective when it's based on accurate demographic data.
2. Focus on "customer first" service
Developing a "customer first" mentality means more than just customer management, it means going above and beyond with every customer-related decision you make. It's important to empathise with your customer base, focus on the details of the relationship, and be prepared to ask questions when required. Once developed, good customer service is a habit that continues to strengthen your business year after year.
Putting your customers circumstances first needs to be key to the business decisions you make – e.g. product enhancement and services offered.
3. Always strive to exceed expectations
While anyone can tick boxes and match people with products, only the best have what it takes to surprise, delight, and inspire action. Developing an "above and beyond" attitude requires relational intelligence, with real business leaders able to reach out and engage with the market.
Measuring customer service levels and listening to the feedback from your customers is a great way to start. After all, how can you improve when you don't even know where you currently stand? If you breed the right culture in your work place going above and beyond for your customers becomes the norm. And customers repay this exceptional service with loyalty.
4. Seek continuous feedback
Valuable feedback from people engaged with your business is critical to your organisation. It's important never to shy away from feedback, and to show appreciation whenever it's offered. Even a bad review can be beneficial; in fact, they're normally the most beneficial of all. Ask considered questions, listen carefully to answers, and be prepared to adapt and evolve your processes in order to meet market needs.
Using smart tools such as Trust Pilot and Net Promoter Score allow you to gauge the success of the service you are offering. However, it is only by engaging and truly listening to your customers that you can continuously improve and offer the best service you can.
5. Show appreciation
Regardless of your business type or your key demographics, everyone likes rewards. While friendly and open communication is all well and good, sometimes it's important to boost customer relationships with something more tangible, and more mutually beneficial. Whether it's loyalty points, discounts, specials, or cross promotions, there are lots of ways to let your customers know that you care. Be innovative, be different, but always think of it from the view of “what’s in it for the customer”.
6. Prioritise customer retention
While customer acquisition is important for growth, customer retention should always be one of your top priorities. The cost to acquire a new customer can often be large. Compare this to the lifetime value of a loyal customer and it becomes a no-brainer to focus on customer retention.
You can develop CRM tools that focus on retention in order to keep track of returning customers and improve loyalty rates over time. It's important to treat each sale as the start of a relationship, rather than the end-game. Treat customers as your partners rather than your clients. And show them you appreciate them - send them thank you notes, provide discounts on repeat business or simply recognise them on social media. Simple things can go a long way.
7. Personalise relationships through tailored communication
In the age of big data and vast global, digital networks, a personal touch is more important than ever. By segmenting your market and reaching out to them on their own terms, you can build relationships based on trust and mutual respect. A small personal touch can have a huge effect, with tailored messages and birthday specials a great way to build customer satisfaction and loyalty over time. Implementing a CRM system along with a marketing automation system can help you to achieve personalisation at scale.
While it might seem obvious, few SMBs choose to invest and focus on customer satisfaction and loyalty. In a world where growth targets rule supreme, it's easy to forget about your existing customers and the important role they play in your long-term success.