Why is customer retention important to brick and mortar stores?
It’s a lot easier to sell to old customers compared to first-timers. In fact, the Harvard Business Review found that acquiring a new customer is 5 to 25 times more expensive than retaining the ones you currently have.
This phenomenon is true whether you’re selling products or services. Convincing a first-time customer takes a lot of handwork and marketing. They have no experience with your business, so you’ll need an effective funnel to influence them to spend more with you.
In contrast, second-time or third-time customers already know what to expect. If they liked the first experience they had with you, there’s a good chance they’ll come back for more. There’s no need to convince them because they’ve already tried your services.
That said, how do you increase customer retention? How can you incentivize customers to become regulars? Here’s what you need to do:
1. Create a Loyalty Program
When you were a child, I bet you loved earning points and rewards for recitation, getting top scores and winning games. While you probably aren’t interested in earning points to impress your teachers and parents anymore, you probably like to earn points or rewards from your credit cards. You’re attracted to small discounts and free giveaways.
This is one of the reasons why loyalty programs are a great way to increase customer retention.
Loyalty programs work because they reward customers for using a business or brand. Who doesn’t want to receive rewards?
Fortunately, creating a loyalty program is easy. You can use CandyBar—a digital loyalty card.
CandyBar lets you track customer interactions and behavior such as number of visits to your website, sign-ups, and the steps it took to make a conversion.
2. Improve Customer Service
What differentiates brick and mortar stores from online ones is customer service. Sure, you can talk to a salesperson via live chat, but nothing compares to interacting with someone face-to-face.
For example, in brick and mortar stores, you can chat with sales reps and get a live demo of a product or service. That’s not the same thing as watching a product video or reading instructions from an FAQs section.
That said, customer service can increase customer retention when done right. In fact, data shows that proactive help, consistently good service, friendly interactions and personal relationships impact repeat purchases. After all, you’d prefer to buy from a saleslady you get along with, rather than a complete stranger.
In short, having great customer service is vital to brick and mortar business. And you don’t need to do anything drastic to offer great service. Simply talk to your customers and train your staff to be knowledgeable about your establishment.
3. Launch a Referral Program
Customers are your brand ambassadors. You rely on them to spread the word about your product or service in the local area.
Studies also show that people buy products based on word-of-mouth recommendations from their friends and family.
In fact, a Nielsen study found that 67% of customers believe that they are more likely to buy products that have been shared or recommended by their social media network. Meanwhile, other studies found that referrals help businesses get customers that are more likely to have higher customer lifetime value and more repeat purchases.
This makes sense because we’d rather believe and pay attention to people we trust, instead of sponsored ads.
That said—how do referral programs work?
Whenever your customers and clients give you positive feedback, you can ask them if they want to join your referral program via Facebook Messenger or email. They can then spread the referral offer to their friends and family.
Customers might need a little push before they make the recommendation. So choose a simple reward and get them to advocate for your brand.
For example if you sell burgers, your customers could get a free hamburger in exchange for successfully referring a friend. And the friend also gets a free burger when they make their first purchase.
You can use apps like Candybar to get started with your referral program.
4. Offer a Discount or Promo
You might be wary of offering discounts and promos but they’re one way you can get customers to keep coming back. After all, who doesn’t want sales and discounts?
You can offer limited-time discounts and offers through your loyalty program. For example, MyPanera surprised select members who regularly ordered Mac & Cheese with a bacon mac for a limited-time period. It also gave a 1-Day Soup Freebie to customers for its delivery rollout.
It’s certainly nothing new, but it’s one surefire way to boost sales and encourage customer loyalty.
How will you increase customer retention?
There are a lot of ways you can increase customer retention in your brick and mortar store.
You can create a referral program and loyalty program through Candybar. And you can give discounts and offers via your loyalty program.
This is one way you can incentive users to come back to your store and promote it to their friends and family. But don’t forget that customer service is also key to your success. After all, first-time customers need a lot of convincing.
This post was created in partnership with ReferralCandy, written by Monique Danao. She is a writer and content creator at ReferralCandy and CandyBar with an expertise in marketing and SEO. When she’s not writing, you’ll find her enjoying funky food, listening to music and marketing startups.