Chapter 13
The ability of your business to generate future revenue from past and present customers is a key part of its value (and a major consideration for potential investors). So Client Retention is an important part of the Formula.
It’s also an area in which you make some quick wins. If you have been in business for a few years or more, and you have a database of past and present customers, this is an asset that has the potential to be the engine for much of your business growth in the first year.
In my experience, most small businesses are ignoring, or not properly utilising, this important asset. So how can you keep your customers coming back year after year?
It starts with regular communication. In Chapter 11, I mentioned that we get sent quite a few catalogues from various brands. In addition to displaying new styles, the catalogues serve to remind us that these brands still exist, and to keep them uppermost in our minds.
Another important activity is collecting feedback from customers. Not only is this an excellent way to ensure that they are happy – and to make amends if they are not – it also enables you to keep abreast of the needs and desires of your market. Do this better than your competitors, and innovate faster, and you will build up a powerful competitive advantage.
Innovation is also a powerful strategy. Think of how Apple, and other technology and consumer goods firms, keep customers coming back year after year, by constantly releasing new and updated models of the same product!
Improving client retention is a long-term and ongoing process that begins even before your customer makes their first purchase: so all of the activities I have discussed in the previous chapters are relevant.
Work hard at building your business, one customer at a time!