Seeing a new face walk into your store is exciting. It means your marketing or promotions are working and word is getting around about your business. But it’s what happens after that new customer walks in that is most important.
A customer’s initial experience in your store will determine if she come back again. And to grow, your business must retain first-time customers.
There are specific strategies you can implement to encourage new customers to keep coming back. But you must first understand your customer retention rate, or how well you’re currently retaining customers. Your customer retention rate signifies what percentage of customers you keep over a certain period of time. For help determining your customer retention rate, click here.
Now, let’s discuss how to analyze your customer retention rate and the strategies you can initiate to improve it.
1. Consider your customer retention rate, and what’s causing it.
Whether you already have a loyal customer base or you need to drastically improve customer retention, you must determine what’s causing your retention rate. If you have a low retention rate, dig into why your customers aren’t sticking around. A low retention rate could be due to poor customer service, low stock, unappealing dressing rooms, uncleanliness, etc. Or, let’s face it – the competition may have you beat.
If you are experiencing good customer retention, you’ll need to determine what’s motivating your customers to return. Regardless of your retention rate, ask all of your employees their opinion of the customer experience. Look at any customer trends, mystery shop your competitors and/or send out a customer feedback email to gain helpful insight.
2. Make necessary changes to improve the customer experience.
Once you have determined what’s leading to your customer retention rate, you must implement the necessary changes to improve customer retention. Of course, if changes are needed, they likely can’t all be completed overnight. Prioritize the adjustments that you feel are most important, and check them off as promptly as possible.
3. Implement a strategy to increase retention.
Customers need to feel valued, and they also need to see the value in buying from you. In fact, the customer experience will outweigh price and product by 2020, according to a Walker study.
Here are three strategies to help increase customer retention:
Initiate an incentive program.
An incentive program can turn a one-time customer into a loyal customer. That’s because the program rewards those customers whom are frequent buyers. An idea for an incentive program would be a punch card. For every X dollar amount spent in the store, a hole is punched. Once the customer reaches, say 10 hole-punches, they receive a discount or a free item.
Consider if a competing lingerie store offers a similar product, price and customer experience, but they don’t offer an incentive for customers to buy from them. Those customers would see more value in buying repetitively from you because it will provide a cost savings down the road.
Offer a referral program.
Referral programs encourage loyal customers to spread the word about your business because they’ll get a discount when a referral makes a purchase. One way to offer this program is to ask customers at checkout if they were referred by a friend. If so, take down the referral’s name and the referrer’s name, phone and e-mail address, then notify the referrer with a coupon via email. It’s a good idea to put an expiration date on the coupon to motivate the referrer to come into the store soon.
Make your store a pleasure to visit.
Customers not only need to see the value in buying from you, but they must enjoy buying from you. From well-lit, clean dressing rooms and accessible restrooms, to an organized store and friendly associates, it should be a pleasure for customers to visit your store. It’s also important to display return, exchange and refund policies clearly so there’s no confusion on what’s permitted. Consider anything else you could do to make your store welcoming, such as opting for an air freshener or informing customers about specials upon entering your store.
4. Notify customers of any new programs.
Once you’ve optimized the customer experience and have a strategy in place to retain new customers, it’s time to let people know. Create an email campaign about any new store programs, and send it to existing customers. Pushing out a social media campaign and having the new program clearly visible on your website will also create awareness.
5. Continuously monitor the customer experience.
As you grow your customer base, it’s important to continue monitoring the customer experience. Check-in with employees and customers regularly for their opinions. Respond to social media comments promptly and effectively. It’s essential you analyze the success of your new initiatives regularly to see what’s working and what may need improvement.
As a small business, you rely on repeat customers. By having a strategy in place to retain first-time customers, you’ll be more likely to convert them to loyal customers, and thus, grow your business.