Each customer matters. When asked, every small business owner or manager will explain quite clearly about the daily trials and tribulations of running a business. Inflation, supply interruptions, and changing buyer preferences are only a few hurdles small businesses experience every day. However, there is one constant to remaining in business. Each and every customer is important to the bottom line of every business.
Razor-Thin Limits and Fiscal Susceptibility
Because of their size, most large businesses have the capacity to withstand any short-term deficits. That’s not the case with small businesses who live within razor-thin limits. By losing one longtime customer, a small business can experience a “ripple effect.” For example, if that one customer, then becomes two, three, or even 10 fewer loyal customers, that ripple can turn into a tsunami of issues. With a large exodus of customers, small business owners or managers may actually face the harsh reality of whether to stay open or close down.
Cost Per Customer Acquired
Businesses (large and small) spend a lot of money trying to entice and build a customer base. A lot of time and energy goes into attracting new customers. At the same time, various sales and marketing initiatives cost money to implement.
On the other hand, keeping a customer costs a lot less money. Retaining customers is far more cost-effective. Existing customers know your business already. Therefore, there’s really no need to “sell” them your product or service. However, you can’t take a current customer for granted. A business needs to maintain that positive relationship with an existing customer.
Customer Clout
Whether a business realizes it or not, customers carry clout in the community. A happy and satisfied customer can turn into a true ambassador encouraging others, either verbally or online, to become customers. On the other hand, an unhappy customer can negatively impact the bottom line for a business with unfavorable social media posts.
Every business wants to stay away from the Gottman ratio where five positive customer comments and/or reviews are needed to counterbalance the pain of one negative statement. Consequently, customer clout carries a lot of weight in the minds of potential new customers.
Erratic Spending
During challenging economic times, cost cutting is usually the first “go-to” move for both customers and businesses. Every purchase becomes heavily scrutinized, thereby lengthening the time it takes to buy a product or service. This period of erratic spending not only affects existing customers, but also lowers the number of potential new customers.
This environment provides a huge hurdle for a business looking to keep happy those customers who are able to spend money. Therefore, a business cannot take an existing customer for granted by forgetting to provide superior quality products and services. Otherwise, that longstanding customer may “walk right out the door” to your competitor.
Consumer Comments
Every business must have an open ear for consumer comments. After all, who knows more about your business than current and faithful customers. Their input can be valuable in highlighting, from their perspective, what they consider to be the positives and negatives of a business. By seriously reviewing consumer comments, a business can adjust its selections, prices, or services to better meet current customer demands. Listening and acting on consumer comments can greatly assist a business with its decision-making process. The end result is a competitive and thriving business.
Trust is Built on Consistency Over Time
We’ve all heard about English playwright John Heywood’s proverb, “Rome wasn’t built in a day.” Well, building trust between a business and a customer doesn’t happen in a day either. Because of quality service and attention, trust is built through a long-term relationship between the business and customer. If that trust becomes derailed due to customer displeasure, a business may never get a second opportunity. Your unhappy customer may end up as a customer of the competition.
It is vital to retain long term trusted customers. That approach is better than ignoring reliable customers in leu of attracting new short-term customers.
Tip of the Iceberg
Every business needs to be aware of any customer defections. The loss of a customer is only the tip of the iceberg which may signal underlining business problems. Therefore, a small business owner or manager should conduct a business self-evaluation. Has the quality of our products or services declined? Are we not following up on customer questions in a timely manner? Do we charge too much?
Ignoring customer defections is not the approach any healthy or thriving business should follow. Catch a problem early and solve it before it becomes too overwhelming for a business.
Customer Retention
Identifying the value each customer brings to a business is only step one in maintaining customer loyalty. Therefore, every business needs to regularly follow this “Must-Do” checklist:
- Keep open the lines of communication.
- Individualize the service.
- Ask for a customer review.
- Offer retention perks.
- Educate employees.
- Check-in with customers after their purchases.
In Summary
Needless to say, running a small business in today’s climate is challenging. Therefore, keeping each and every customer is critical for a business today and tomorrow.
A devoted customer base equals money and steady business. Losing even one customer could lead to an exodus of additional customers. Therefore, to avoid an avalanche of customer defections, every small business must maintain a laser focus on price, service, worth, and value. Maintaining customer relationships is one factor a small business can control in today’s environment. In essence, each customer matters!
