We have posted frequently in the past on how important it is to retain current customers and how it is much less expensive than acquiring new customers. This topic of customer retention is important for any business owner, but especially small business owners since they may have more limited resources (both time and money) needed to get those new customers to replace customers that leave.
I recently ran across an article that addressed this topic, When Customers Stick: Customer Retention by the Numbers from Small Business Trends. The article employed a very clever visual representation, called an infographic, to depict these three key elements of customer retention.
- Why Customers Leave
- Why Customers Stick
- Retained Customers Mean
There lots of interesting numbers in the infographic on these three areas, but to me three points were especially important and interesting. The article made the point that 82% of consumers in the United States that stopped doing business with a company stated that is was due to a poor customer experience. Two of the top reasons were a reaction to rude staff (73%) and issues not being resolved in a timely fashion (55%).
There was some good news for those lost customers, though, in the section on Why Customers Stick. 92% of customers said they would go back to a company if they received an apology or correction from a supervisor or owner (63%) or received a discount (52%).
Last but not least were some real eye opening statistic on why it is so important to retain your current customers. The article states that bringing a new customer up to the some level of profitability as a lost customer cost up 16 times more and repeat customers spend 67% more and have larger transactions.
These are just a few highlights I spotted from each of the aspects presented in the article and I think it would be well worth your time to read (or is it view?) the whole infograph and it might be a good idea to share it with all your employees as well.
Even if you aren’t a regular user of Twitter or Facebook and haven’t even heard of some of the hot new social media avenues such as Pinterest, as a small business owner it is becoming increasingly important to monitor your online reputation. After all even if you don’t use social media frequently, an increasing number of your customers do and the first place many customers report on their customer experience (either good or bad) is via social media.
I recently read Customer Experiences Go Viral on Social Media Platforms that describes how important it is to monitor social media since it is becoming so popular with people to describe their customer experience with businesses. To quote the article.
When someone praises your company on a social media platform, it is important for you to respond to them and thank them for their feedback. Even more importantly, when someone voices a complaint about your services, your response is critical. Within hours, your response to your disgruntled customer can go viral—even obtaining national attention (something you definitely don’t want).
The article then goes on to give an actual example of a small business that didn’t follow up effectively on a customer complaint. It seems a florist had a dispute around Valentine’s Day with a customer on an order and the customer posted something on Facebook, the florist posted an ineffective response on their Facebook page, and the rest is history. As the article describes.
It has been several months since February 14, 2013 and the company is still being plagued by this one negative customer review and their response to the customer on Facebook.
Regardless of who was right in this situation—the woman, the florist, or some combination of both—it is clear that this unfavorable customer experience was not handled property by the florist. As a result, its entire online reputation (and probably much of its local reputation) has been affected.
Of course no business can satisfy all customers all the time, but the lessons from the article are clear. Make sure and monitor your company online and do your absolute best to placate the customer that does have a less than satisfactory experience. The whole online world really is watching.
An associate at the company where I work trained very long and hard to be certified as a yoga instructor and teaches a free yoga class once a week for other associates at our company. It is very well attended and very popular and I was talking to someone who attends faithfully and she described how the classes were extremely beneficial and her only regret was the class was only once a week.
I thought the same enthusiasm and benefits from yoga were expressed in The yoga of business and the article also described how there are lessons and skills to be learned in yoga that can be applied to your business as well.
Yoga is big on teaching, learning, awareness and introspection: Whether it involves emotions and attitudes, relationships, health and well-being, or even life’s big questions, there are good lessons and life/business skills to be learned, and you don’t have to be the least bit earthy-crunchy (I am the furthest thing from it) to benefit from them.
The article goes on to describe these 5 important lessons that can be taken from yoga.
I know I could certainly benefit from an improvement in my focus, but I think for many small business owners the first lesson might be the most beneficial – as described in the article:
Equanimity is a state of calm and balance that flattens out the extreme mental/emotional sine wave of business, which for many people — especially small business owners — is reactive and counterproductive. Everyone knows that rule number one in a crisis is to remain calm, and there’s a reason for that: Calmness always leads to better decisions and a better ability to work with people. To be equanimous is, in more current parlance, to be “chill.”
Next time you are having one of those really demanding, stressful, hectic days at your small business maybe a lesson learned from yoga could help you weather the storm.
I thought of the old saying “better late than never” when someone reminded me that this week is National Small Business Week. I’ll make sure to mark my calendar next year to start looking for the dates for the 2014 event early in the spring since the dates vary from year to year (last year it was in May). Even if you are late to the party like I am, the link above has some short updates so there are still some things you can take away from this annual celebration of small businesses that has been held every year since 1963.
I also read an article from AWeber Communications, It’s Time To Celebrate Businesses Like Yours that has some more information on National Small Business week and an added very timely bonus as well. To quote from the article:
Though the Stars and Stripes don’t turn 237 ’til July 4, we’re starting the celebration early with a gift for you!
We’ve been hard at work making three Independence Day email templates that you can use for your summer sales.
They’re all free in AWeber accounts (of course!), but even if you’re not an AWeber user, we still have one for you!
There is a link in the webpage to a free Thomas Jefferson email template, but of course you will have to modify the html for your particular business. Even if your html skills are limited, the included images might be useful in your own Independence Day broadcast email.
Even though it is in the last hours of Small Business Week, now is the time to think about Fourth of July promotions for your small business.
There are many advantages to being a small business owner, but one of the downsides is how to effectively provide negative comments to your employees. In a perfect world every small business owner would be blessed with uniformly outstanding employees, but unfortunately no matter how good most of your employees may be, there are times when negative feedback is required.In the past this blog has concentrated on this topic with problem employees, but there are time when such feedback is needed with some of your other workers.
How to Deliver Uncomfortable Employee Feedback focuses on this unpleasant task and gives some tips for the following situations.
- An employee wants a promotion but isn’t ready.
- An employee is a good worker but clashes with the team.
- An employee started out strong but is no longer growing and improving.
I think situation two and three are the most common and difficult to deal with in any business. There are always going to be personality conflicts, but in my experience situation three may be the most common and difficult to deal with. We all know the wonderful feeling of a new job or promotion, but over time that enthusiasm can fade. To quote from the article.
Many employees who stop growing no longer feel challenged. “At a new job, passion and energy are really high but competence is really low,” Folkman says. “New employees are hanging on by their fingertips and don’t quite know what they’re doing.” The newness forces them to learn and grow very quickly, creating a satisfying sense of accomplishment. Over time, passion can fade as competence grows, leading people to coast on their expertise without really growing or improving.
The article goes on to describe how the solution to this problem is go give employees new problems to solve so that there job remains challenging.
The 2008 financial meltdown wreaked havoc for many people looking for employment with both large and small businesses. I did some research and came up with this interesting article from the Washington Post on the history of unemployment in the United States after World War II, and the unemployment rate during recent years is comparable only to the late 70s. Many Americans, faced with this dismal unemployment picture elected to start their own businesses. As economy improves, more entrepreneurs break into market, uses the phrase “necessity-driven new businesses” to describe this trend. It seems that the situation has finally changed. To quote from the article:
Now five years later as the recovery gains traction, new data shows the tables have turned. Instead of necessity-driven new businesses, more U.S. entrepreneurs are launching ventures based on perceived opportunities, growth ambitions and a broad optimistic outlook—a group sometimes called opportunity entrepreneurs.
The article goes on to report that some states are better than others, one example is Texas which offers the following advantages for entrepreneurs:
There’s no state income tax. Capital and grants to the local start-up community are abundant. Strict mortgage rules prevented Texas from experiencing many foreclosures, keeping the local housing market stable. And the public school system is highly regarded and growing, according to the report.
Even in a business friendly state like Texas, the article reports that staying in business is a challenge for any new or established small business. Financing can be a big issue, so be very careful to make sure you have it in place for a new small business or monitor it regularly and closely for an established business.
Memorial Day was last weekend and to many of us it is the official start of Summer and vacation time. I remember when I was still in grammar school and junior high that it was three months of absolutely free time, with no obligations of any kind. There was even a song by Nat King Cole, Those Lazy Crazy-Hazy-Days Of Summer that summed up those Summers of long ago. How times have changed with the new technology of laptops, cellphones, and the even newer technology of tablets and smartphones. Many employees have a hard time disconnecting from work and come back to work as stressed as when they went on “vacation”.
That was the beginning premise an article I recently read, How to Maintain Productivity During Vacation Season. To quote from the article:
When you’re operating with a small staff, it’s scary to be without key personnel. It’s even scarier to pull yourself away from work. However, vacations have the power to re-energize you and make you feel like you can take on the world again.
The article provided the following tips for you and your employees for stress free vacations this Summer.
- Establish a formal policy.
- Set communication boundaries.
- Ask employees to update their job descriptions.
- Cross-train your staff.
- Create a calendar that everyone can access.
- Plan to cover assignments.
- Alert outside contacts.
- Make important information accessible to others.
I would suggest one more tip not mentioned in the article based on the company where I work. We have a very advanced phone system with great voice mail capabilities. If your company has the ability to change personal greetings on extensions, please remind your employees to change their normal greetings to reflect the fact that they are on vacation. It will help communication with other employees and customers as well.