If you truly want to have a successful business, you have to take care of your most important asset: your customers. Reward their loyalty and keep them on board!
I’m constantly amazed how sharply we fall into two distinct camps in the UK with companies’ attitudes to loyalty.
Some understand that their existing customers are their most important asset. Not only do customers provide continuing business through initial sales, repeat sales, replacements or upgrades (depending on the type of business), but happy customers will also refer new business to you.
They really are a double source of income.
Which is why in my opinion, companies who only chase new customers with a philosophy of “get them in with special offers and we’ll screw them later”, have got it wrong.
These companies not only offer their customers no reward for their loyalty, but they often punish them with higher prices after the initial honeymoon period is over, while the good offers only go to new people.
Unfortunately, it is still a business model that works, to a degree, because they know that most people don’t like change and won’t bother to shop around. People are inherently loyal as well as a bit lazy, so these companies can get away with it for quite some time. But, if you mess people around too long, or they realise they are not valued while others are, they will leave and we all know that it cost 7 times more to get a new customer than it does to keep an existing one.
I strongly believe that if you really want the most from your customers, you should reward them for their loyalty – and reward them for referring you.
Don’t increase their prices, but give them a good deal every year, and give them rewards for staying with you, whilst maintaining a healthy profit margin for yourself of course.
Work out what you can afford to give away, and think about the lifetime value of your customer. If someone spends £1500 a year with you, you can afford to give them a £50 voucher after two years. And of course if they spend £10,000 a year, you could most definitely give them a very special reward!
So think about how you can reward your loyal customers, so that you can make the most of your company’s most valuable assets and be royally rewarded for it too.