Growth is always an important factor in the startup world, but it shouldn’t occur at the expense of customer retention. Attracting new customers costs businesses 5x more than keeping existing ones, and a 5% increase in customer retention can lead to a 125% increase in profit. Nurturing existing business relationships before going out and cultivating new ones just makes logical sense.
The question that many hyperlocal vendors still struggle with is how to keep their current customers satisfied without slashing prices or devoting too many resources to a single client. Here are eight strategies from hyperlocal experts, with specific advice on how to grow and nurture existing customer relationships.
1. Visit clients in person. “Visit your client in person — especially if it is an owner/operator. It is vitally important to see how they are doing and whether you can do anything to help them grow their business. If a client wins an award, stop by and congratulate them for their accomplishment. In addition, become your client’s customer. One of my clients is a local pizzeria. My husband and I often eat there. I have even met with other clients and new prospects at that restaurant. This builds a solid foundation and it builds a friendship.” (Sheryl Eikman, WelcomeMat)
2. Share best practices. “We schedule consultations with existing customers to ensure they get a good ROI from Perkville. In these consultations, we share best practices from similar businesses that help grow their revenue. For example, in the fitness space where we are a leader, we’ve learned how to implement a reward program to increase retention, drive referrals and increase revenue per customer by driving upsells into personal training and memberships.” (Sunil Saha, Perkville)
3. Give loyal customers a sneak peak. “As a startup, consider inviting your best customers into your beta programs to get a sneak peek at new product launches and take their feedback into your product development. There is no right way and wrong way to nurture customers. Be authentic to your brand and treat your customers as you wish to be treated. Consider your customers as an extension of your company and your brand. (Matt Anderson, hibu)
4. Referred clients are loyal clients. “Referrals carry a ton of clout. If a friend refers you to a service, you start off immediately with a higher level of trust in that service, right? In growing our customer base, we reach out via our loyal customers to their friends and peers. So even though we’re one step away from our existing customers, we’re making use of the trust we’ve earned with our customers to launch us into new territory.” (Rob Maurin, Wave)
5. Keep clients in the loop. “Make sure that your clients know that you haven’t forgotten about them. Your relationship cannot simply be a transactional relationship. Along with meeting your clients periodically, let them know that you care about their business and about them as people. In the long run, they will reward you.” (Sheryl Eikman, WelcomeMat)
6. Educate your clients. “At Qubit, we have an effective hands-on approach when educating our clients on how to properly utilize personalization technologies and real-time data. We provide research and education tools, such as instructional videos/screencasts, video customer case studies, workshop sessions, newsletters, blog posts and ebooks.” (Graham Cooke, Qubit)
7. Discounts aren’t everything. “Often times, startups think that they have to offer discounts or special offers to retain customers. In reality, offers are just one piece of the puzzle. The key is to transform from customer transactions to customer relationships. What all startups should strive for is to being considered a partner for customers vs. just a vendor. Companies should think about the end-to-end experience and how they can differentiate that experience for customers. Examples include tailored product bundles, making it easy for a customer to research and choose your product or service and offering personalized service.” (Matt Anderson, hibu)
8. Maintain a healthy balance. “All new businesses must have a business development plan with the goal of finding a balance of existing customers and prospects. There must be check points in that plan to ensure existing customers are happy and feel that they are getting the service and attention they deserve. When new businesses fail it is often because they promise and acquire, then forget to fully engage.” (Bill Warelis, Loyalty Match)
Interviews have been edited for length and clarity.
Stephanie Miles is an editor at Street Fight.