There are few things more important to the long-term success of a business than the loyalty of existing customers. Consider the following:
- It can be more expensive to win a new customer than to retain an existing one.
- The costs and risks associated with existing customers are known. Those associated with new customers are more volatile.
- Existing customers are usually the best prospects for sales of additional products or services.
- Existing customers are the best source of qualified referrals.
- It is usually more enjoyable to work with an existing customer because of the long-term existing relationship.
Why do customers leave?
Customers are usually lost as a result of one of two circumstances:
▪ The delivery of a poor quality product or service resulting in customer dissatisfaction.
▪ The sales efforts of a competitor convince your customer to leave and switch their business.
Below are some specific situations that can place your customer relationships at risk, along with some ideas for keeping existing customers loyal to your business:
A customer is unaware of one of your products that will address its needs. Often, once an initial sale is made, there is little effort to further explore other needs the customer may have. The time just after the initial sales is an ideal time to ask if there are other needs that may be met with your products.
A customer feels neglected and taken for granted. Even if your company’s usual contact with the customer occurs through your sales group, a contact from your senior management — a call, letter, email or visit — demonstrates the value you place on the customer’s business.
A customer’s needs change but the customer is unaware you have products/services that would meet the new need. Your customers’ wants and needs are constantly changing. If at all possible, you should try to keep informed about what your customers are doing so you can identify how you can sell additional products/services to respond to those changes. It can also help to have a communication program that keeps your customers informed of your company’s successes and new products or services. Newsletters or frequent update letters, calls or emails can keep the customer informed and reinforce your presence.
Nurturing customer loyalty can result in both immediate and long-term benefits. With the competitive environment most businesses face, working to strengthen customer relationships and loyalty needs to be a high priority. As relationships strengthen, your customers can be not only a source of continued business, but also of new business and new customers.
This news is provided as a service to you by Marlin Business Services Corp., a nationwide leader in commercial lending solutions for the U.S. small business sector. Marlin’s equipment financing and loan programs are available directly and through third-party vendor programs, including manufacturers, distributors, independent dealers and brokers, to deliver financing and working capital that help build your success.