In a recent post, you learned how to calculate the Lifetime Customer Value for your local business. But now that you know how much each customer is worth to your business, are you doing everything you can to keep them coming back and increase the revenue you get from each visit?
Of course, delivering top-notch products and the best customer service are an essential foundation for any customer retention strategy. But here are 10 things you should consider doing to maximize each aspect of the Lifetime Customer Value formula.
Make Ordinary Transactions Bigger
1. Create a basic bundle. Offer bundled products at a special price so at an initial transaction, a customer finds buying multiple items more attractive than just one. Make sure the items you’re bundling are the kind that would normally be purchased at the same time to make the deal a no-brainer (ex: the appropriate cables for an electronic device).
2. Offer a discount or cash back over a certain amount. Giving customers 10% off all purchases totaling $300 (or whatever price makes sense for your business) is a great way to motivate customers to spend more at a single transaction. Just be sure to set the threshold to a point where you can still make a profit while your customer still feels like they’re getting a deal.
3. Upsell & cross-sell. Train employees to identify which unbundled products or services go well together, so they can be suggested at the point-of-sale. A good example might be an extended service or warranty plan that will protect your customer’s investment over time.
Bring Them In More Often
4. Start a customer loyalty program. If you don’t already, offer a discount or special VIP products or services after a set number of repeat visits, or once a certain dollar amount has been reached. Stick to stamping cards if you prefer analog, or consider a digital option where each visit or dollar amount can be tracked via your computer system.
5. Hop on the location-based app bandwagon. If you own a small retail business, chances are your customers are using fun, location-based apps like foursquare or Gowalla to earn points and bragging rights to their favorite places to visit in your city – so reward them! Give out freebies and discounts for the most check-ins to incentivize more visits to your store.
6. Host private promotions and events. Nothing makes a customer feel like a VIP more than a closed-to-the-public shindig. The more exclusive the offer or event, the more likely your customers will find a way to participate. (Ex: If you’re a spa, invite your customers to try the newest line of products before anyone else at a special sampling event.)
Build Long-Lasting Loyalty
7. Make a human connection Your customers are people, and in a world of automated phone systems and self-checkout lanes at the grocery store, it means a lot when you treat them like a human being. Learn more about their interests, their hobbies, or their unique pain points so you can find special ways to enrich their lives with your business, and watch that relationship (and Lifetime Customer Value!) blossom over time.
8. Be reachable. Whether a customer has a compliment or a complaint, it’s crucial that you hear it first. Giving great customer service is one thing, but demonstrating consistency over the long haul will let your customers know that they can depend on you. And when it comes to building customer relationships that span several years, dependability and trust are the cornerstones.
Make Infrequent Transactions Go Further
9. Offer special financing plans. Special purchases are tricky, because they’re usually big-ticket, unexpected sales (like pet surgery if you’re a veterinarian or a water heater replacement if you’re a plumber). Take the sting out of these necessary transactions by offering flexible payment plans, with no interest or deferred payment, and customers will be sure to repay your kindness with their loyalty.
Make Word of Mouth Work For You
10. Start a customer referral program. Don’t just expect them to do it: ask existing customers to spread the word about your business to their friends and family on facebook by offering discounts, freebies and upgrades for every referral that makes a sale with you. And to boost your small business online reputation, ask your customers to write online reviews on your Yelp and Google Place pages. While it may be harder to track referrals through online reviews, you can – and should! – thank them with a special deal or discount.
So when thinking of ways to increase your Lifetime Customer Value, what are some common themes? Find more reasons to bring customers back to your store, then give them valuable discounts and goodies to close bigger sales. Offering great products and service is the backbone to any successful business, but giving customers a reason to feel like they’re a part of something special is what’ll keep them coming back to you.
What are you currently doing to maximize the Lifetime Customer Value for your small business?