6 Ways You Might Be Killing Your Business — And What to Do About It

Being a small business owner in a competitive industry can be tough. Customer retention and acquisition can become challenging for several reasons: maybe your competitors are outspending you, maybe their marketing campaigns are more efficient, maybe they just have great customer interaction.

Whatever the reason is, your business must take the initiative and reverse the tide. In this article, we’ll discuss some common reasons you may be losing your customers and dive into some solutions so that you can build your client base, incentivize customer loyalty, and grow your small business.

Why Is a Repeat Customer Base Important?

Repeat customers are what makes a business successful. They provide the bulk of business and supply your business with a steady and consistent source of revenue. In fact, the book Marketing Metrics reports that the probability of selling to an existing customer is 60 to 70%. In contrast, the probability of selling to a new customer is only 5 to 20%. That is a significant difference, to say the least.

1. Bad Customer Service

The importance of high quality, friendly, and personable customer service in the business world cannot be stressed enough. Great customer service is how your small business can build customer relationships. It’s what builds a loyal customer base and it encourages current customers to recommend your product or service.

Poor customer service is one of the easiest ways to lose customers. So, how do you go about identifying and fixing poor customer service? Well, it depends on the root cause of the problem.

First, you want to make sure your employees are well-trained and well-equipped to meet customer needs.

Second, if you are in a service-oriented business, such as home renovation, train and encourage your employees to go above and beyond. They should be friendly and courteous when on the job site. Don’t forget to focus on the details: Small, courteous gestures — such as taking off your shoes or putting on shoe covers when working on an interior job — make a big difference.

Alternately, if you are in the retail business, assess your return policy. How is it impacting customer experience? Sometimes poor company policies on returns and exchanges can really hurt a business: A no return policy on all items is definitely not going to help your business build a loyal customer base. By contrast, a 60-day return policy offers customers ample time to make returns, but it also doesn’t give them so much time that the item will be outdated and worthless to your business when they return it. This is a policy that is good for both your business and your customers.

If your business only sells products online on its own site, make sure your customer support team is being friendly and going above and beyond for callers/emailers. Treat your customers how you would want to be treated. If you find that you are frequently putting customers on hold, perhaps consider utilizing a callback service.

Remember, just one poor customer service experience can cause a customer to never use your products or services again. It can also lead to a poor customer review on sites like Yelp. If this happens, not only did you lose a customer, but now that review will serve to ward off potential customers from giving your business’s services a try.

2. Not Rewarding Customer Loyalty

Sales tactics can be challenging, especially for small businesses. Unlike large corporations with massive sales and marketing budgets and near-unlimited resources, small businesses typically have limited budgets and a limited number of employees. This means you have to be wise and tactful in your approach to sales techniques.

Rewarding loyal customers is an important sales technique and a massive component of customer retention. Too often businesses get caught up in offering tons of “new customer sales” as a way to drive client acquisition. New customer sales, such as Get 10% Off Your First Gutter Cleaning, leave current customers feeling both unappreciated and disappointed that they have to pay full price, especially when the sales appear in a pop-up each time they visit the home page of your business’s website. Plus, if your competitors are doing the same thing, odds are clientele within the market will keep jumping from business to business to get the deals.

As opposed to — or in addition to — new customer sales, your business may want to try setting up a loyalty program or offer repeat customer sales. Return customer sales, like 10% Off Gutter Cleaning Services for Return Customers, keep customers returning and helps build your small business’s reputation. They also incentivize longtime clients to leave positive customer feedback on the aforementioned Yelp and other review sites. Overall, they let customers know that you appreciate their business.

If you operate a retail store or restaurant, investing in a customer rewards system that tracks customer purchases can be highly effective. For example, for every $100 a customer spends you can reward the customer with a $15 certificate. Not only will this incentivize their return to your business, but, particularly in the case of restaurants, odds are they’ll spend more than $15 when they return. As a result, this tactic not only helps maintain your customer base but it also drives sales too!

Additionally, if you are receiving consumer complaints, there are numerous ways to use that as an opportunity to turn those complaints into customer loyalty.

3. Not Maintaining Customer Engagement

Customer engagement is a huge part of client retention. Keeping customers engaged with your business and your brand keeps it fresh on their minds. This ensures they won’t forget about your services and products and it also increases the chances that they will recommend you to family and friends.

In the age of social media, customer engagement has never been easier. By continually posting sales and keeping customers informed about new products and services you can make sure your business is visible to the masses.

Consider is keeping a blog about topics related to your business. Not only does this give you something you can post on social media about, but it also drives traffic to your site when customers — both potential and returning — want to read the blog posts. Blog posts can also encourage prospective customers to try your products or services.

Another great way of keeping clients engaged on social media is by performing charity work under your business’s name. You can post images of yourself and your staff building a home, or bringing supplies to a local animal shelter. This both keeps customers engaged and builds a good reputation for your business.

Whatever you do, don’t let your customers forget about you.

4. Inconsistent Quality

The customer experience you offer should be consistent each and every day, whether you are selling products or services. A Salesforce study found that 80% of customers consider the experience a company provides to be just as important as its products or services.

This means it’s extremely important to maintain the same quality across all your products and services. At the same time, your business should ensure that customer interactions are predictable and uniform.

If you offer a home service, make sure that each time you perform the service, you follow the exact same procedure (unless of course, you’ve added a new component). You want your business to seem organized and professional in the mind of the customers. Your employees should appear to the customer to be highly trained.

If a customer knows they are going to receive the same consistent product or service each time they come to your business, they will keep coming back. Humans are creatures of habit. They like predictability, consistency, and familiarity. After all, why would they try a new business, such as your competitor, if they know they can receive quality service or a quality product from your business?

5. Not Rewarding Employees For a Job Well Done

One common mistake that businesses make is rewarding their sales team with a higher commission on new customer sales than on repeat customer sales. This is exactly what you should NOT be doing. This provides your sales team far less incentive to work on repeat customer sales. Instead, sales commissions should be the same across the board. The money you bring in from a new client purchasing a service is usually the same as the money your business brings in from a return customer. So why pay a premium for new customers and jeopardize your customer base?

6. Overpromising or Over guaranteeing

It is extremely important that your business properly represents its products and services. You don’t want to disappoint your customers. Don’t promise things that aren’t true. Make sure any advertisements or marketing initiatives your business runs are realistic in their praise of the product. Make sure your customers are receiving exactly what they think they are purchasing. Don’t say something is American-made and then have it turn out to be made in China. Obviously, that example is on the extreme side of false advertising, but the point is that you should make sure your business is selling exactly what you are advertising.

Overview

Small businesses can lose customers due to a number of reasons. The key is to understand the potential reasons and to work to make sure your business is actively countering them. This means having good customer service, rewarding loyal customers so they know you appreciate their business, keeping customers engaged through email and social media marketing, and delivering products and services that are exactly as you advertise. Further, maintaining a business that prides itself on its consistency is crucial.

Turning around a ship headed in the wrong direction can be difficult, but with the proper customer retention techniques, you can make sure each time you add a new customer, instead of replacing a former customer, you are simply yet another person adding to your loyal customer base.

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