QUESTION: My small business depends on loyal customers. What is the best way to build customer loyalty?
ANSWER: Cultivating customer loyalty is an essential part of any successful business.
But what constitutes a “loyal” customer can generally be defined as follows:
- Willing to pay a premium for what they consider value-added services
- Do not research or be influenced by the availability or prices of other brands
- Willing to recommend your products and/or services to others
A loyal customer will pay a little more for a product that they perceive to be of superior quality, or a service that goes beyond what they have experienced in the past with other suppliers. Craftsmen tools included a lifetime replacement warranty and many high end department stores will accept returns without exception.
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Small businesses with fewer customers have the advantage of personalizing the relationship. They learn the names of their customers and their buying habits. They may offer loyalty programs that include advance notice and discounts. With this information, they can send ads and coupons promoting their customers’ preferences.
All of this keeps the customer coming back to the store, and while you’re there, you have the opportunity to interest them in other products or services.
Proper training of your staff is essential to customer retention. Never assume a new hire knows how to treat a customer. Role-playing with experienced staff is a great way to understand the complexities of dealing with the public.
Let’s take the example of a restaurant that caters to a high-end clientele. All hosts and servers are dressed and groomed appropriately. Your drink, appetizer and entree orders all follow in a timely manner. Your glass of water is always refilled without your notice.
Food is prepared to your specifications, with particular attention to allergy concerns. Waiters never interrupt your conversation and the restaurant manager always knows your name and stops at the table to ensure your complete satisfaction.
Needless to say, the customer will return frequently because they feel appreciated. The icing on the cake is when that loyal customer is so impressed they can’t wait to tell their friends about the total experience.
Sometimes your best efforts just aren’t enough. If you receive a complaint, see it as an opportunity to improve. Be respectful and assure the complainant that their concerns will be addressed immediately. Let them walk away with a gift card that can be used on their next visit.
Gray Poehler volunteers with the Richmond chapter of SCORE, Counselors to America’s Small Business. To ask a question or seek free, confidential business advice, visit richmond.score.org/mentors. Learn more about SCORE’s workshops on the website or by calling (804) 350-3569.