Many entrepreneurs and small businesses in the service industry have difficulty determining value. Whether you want to be at the top or bottom of the price range, or somewhere in-between, you do need a starting point. Research what other companies in similar markets are charging for their services. Setting your price too low at first can make it difficult to retain clients once you have to raise them.
Let’s look at some of the factors that influence client retention.
The Importance of Appearance
Consider the appearance of the company. When marketing your business, do you advertise low prices or a fast turn-around? Are you focused on creating an image of luxury and comfort, or are you targeting teens? Take a hard, realistic look at what your marketing and ads say about the business, and how this influences a potential or current customer’s perception.
Consider whether your image has changed recently. For instance, consider a clothing store that has provided family clothing in the past and has now chosen to focus on a teens, neglecting their current customers. This example illustrates an obvious change that may or may not be in the businesses’ best interest, but is one that will lead to the loss of existing customers. Will these changes bring in enough new customers, and revenue, to replace what is lost?
Is the business “user friendly”? Potential customers are typically courted during the sales process, offered deals, and presented with a can-do attitude. This can create a two-fold problem. First, are you actually able to provide what has been promised once the client is retained? Secondly, are you putting this much effort into retaining current clients? Is any effort put into retaining current clients?
Build Customer Relationships
Creating a relationship with customers makes it easier to not only retain them, but to obtain new customers as well. Word of mouth is the best advertising. A satisfied customer will sing your praises, while an unsatisfied customer can wreak havoc on the reputation of your business.
Customer service is a valuable tool that should be implemented. Take time to foster a relationship with your regular customers and learn what you can do to increase their satisfaction with your products or services. You will gain valuable insight that will increase the businesses’ bottom line.
Marketing Consistency and Value
It is important to consistently contact customers to show them you value their business. Depending on the type of store you own, you might send them a monthly coupon or notice of a special that is operating. Not all contact should be marketing, providing the customer with something of value is important too. A paint store could send out an email showing the 5 most popular colors for the coming season. A gardening store could send out a monthly what to do list, while an HVAC business could send out reminders to change filters.
We recommend taking a hard look at your existing customer base and the image and reputation of your business. There are many ways to increase business by adding new customers, but the general rule of thumb has always been that it is less expensive to retain an existing customer than obtaining a new one. Please feel free to stop by the Chamber and learn more about our services.
