What kind of customer loyalty and retention programmes can small and medium sized businesses easily implement?

What kind of loyalty programs can small and medium sized businesses easily implement

A few days ago I saw a question on Focus.com: What kind of loyalty programs can small and medium sized businesses easily implement?

After seeing the question, I headed over there and left an answer:

“One of the very simple things that I have found to be the most effective in promoting and developing customer loyalty and customer retention in the SME sector is to put in place a programme of contacting the customer on a regular basis and arranging to go and see them or talk on the phone. Nothing like a bit of personal service to make people feel good.”

What I think is interesting is not my answer but what was part of my initial thoughts. One of my first reactions was to come up with a solution or a process or a system or a piece of CRM technology rather than to think ‘Hang on, what have I done with clients that has worked the best and produced the best returns?’

Interesting. Why?

Well, I believe that most of the stuff that is written about customer retention and customer loyalty in the media is about new processes, new systems, new ways of measuring things, new technology business etc. The result of that is that it influences how we think and what we prioritise. If numbers and systems and measurement and technology become your priority then what happens to the customer relationship? Is it just a number in the end? How would you feel about that if you were just a number? How do you think your customer would feel knowing that they are just a number?

I think that taking our eyes off the figures for a while and focusing on the people at the other end can lead to dramatic results. For example, I remember developing a customer loyalty and customer retention strategy for an IT services company client along the same lines as suggested in my Focus.com answer and it resulted in 50% revenue growth for my client’s business in the next 18 months.

However, even though the question was aimed at small and medium sized businesses, I think there are lessons here for businesses of all sizes.

What I’d be interested in is hearing more about what things have you seen or done that are easy to implement that are great for developing customer loyalty and customer retention?

Thanks to enriqueburgosgarcia for the image.

20 comments On What kind of customer loyalty and retention programmes can small and medium sized businesses easily implement?

  • Pingback: Adrian Swinscoe ()

  • Pingback: Adrian Swinscoe ()

  • Hi Adrian,
    I think your response to the post was particularly appropriate to small businesses that offer professional services like many of us do, or other types of business where your focus is on a particular set of touch points. But if your small business is an online one, particularly one with many customers, then I expect we need to use other approaches to stay connected to customers. And of course, if a small business has any type of data capture capacity on who their customers are, how often they make purchases and the size of those purchases, then it’s a fairly straightforward analysis to determine who really are ‘best customers’ that warrant additional outreach.

    So my first reaction would be the interpersonal one, but as I think about different types of businesses with larger numbers of customers, I come full circle to leveraging some type of CRM tools and practices.

    On the chance Bill Park gets a look at your post and this comment, I’d be interested in reading how Bill’s approach to customer loyalty and outreach evolved as his collision repair business expanded in the last decade.
    Marc

  • Adrian,
    I am a student of results and you need data to validate efforts, but what I see happening in the customer satisfaction world is that business is letting the tail wag the dog. They think the report drives behavior, when it is the exact opposite. Just do the human thing, and if the report is not what you are looking for as a result then change what you do.

    What we did in our business was pretty simple:
    1) All first contact was done with high energy.
    2) Follow up was consistent: Personal letter, phone, gift, thank you
    3) Project client: irregular and not-routine communication
    4) Post repair communication: 15 scheduled touch points after the sale

    The results, well pretty good, but we were always looking to be better. Yes, complacency did creep in occasionally. My only real measurements that determined success for me was repeat/referral percentage, if that engine is revving we are good!

    Marc: thanks for asking me!

    Bill
    .02

    • @Marc
      Thank you for inviting Bill to add his perspective to this post. One of the things that I would say to your comment is that I am not sure that I agree that just because a business has a large number of customers or that they are online that the business should not try and introduce a degree of personal outreach to try and ‘build’ the relationship with their ‘best’ customers, if not all of them. Whether, it is practical or profitable or not in the short term would depend on the business but all I want to do is challenge the orthodoxy as a means of building a better relationship base and a base for WoM. What do you think?

      @Bill thanks for your perspective. I completely agree that we need to avoid the tail wagging the dog as you say. I also like your process and the ‘real’ measurement. One question: do you include a WoM element in your referral percentage?

      Thanks for contributing, guys.

      Adrian

  • Adrian,
    Yes, in the category of ‘referral’ I like to look at:
    1) B2B, specifically the person(s) in the business
    2) C2C, prior customer referring friend or family

    This is the organic WoM-piece (kind of a pun):-)

    Bill

  • Hi Adrian 😉

    This is not a small company but a really great example.

    My partner has been working for his current company for the last three years. Each year they take the whole staff team away for a weekend. Not only the staff team but there partners as well. So far we have been to Ireland, Edinburgh and last weekend we all went to Lingfield Park all paid for.

    They also take out there customers for dinner, rugby all sorts of things and include the staff who are doing the contracts.

    OK they will lose some of these contracts but for sure they will never be forgotten and at the next opportunity they will be recommended not only by the businesses they work with but also people like me who are pretty loyal to this company.

    I’ve recommended them I’ve even gone as far as picking up the phone when I see something happening that could potentially damage their brand.

    Wendy

    • Hi Wendy,
      Thanks for telling us that story. I know of many businesses that entertain their clients as a way of building the relations they have with their clients and increasing loyalty and retention. However, what I haven’t heard about very often is businesses that include ‘partners’ in the mix. Now, we could be cynical about this but I think it’s a nice way to be inclusive and spread the relationship and their reach. This has obviously been successful if you are picking up the phone and warning them of stuff that may be harmful to their brand. It’s working isn’t it.

      Thanks for sharing the story.

      Adrian

  • Adrian – Some very interesting thoughts here from you, Bill and Marc.

    Sometimes I wonder if we don’t over analyse these things. I am not sure if you have read Gary vaynerchuk’s Crush It. In it he has a chapter on the most powerful marketing strategy in the world. It was one word – Care.

    I think this is so spot on. We can take all the process and systems and make them super, hyper customer efficient but unless that care is there, whats the point.

    Care is something innate and comes out when inspired. Hard to release and hard to measure but worthy of the pursuit.

    Cheers
    Michael

    • Hi Michael,
      I think you (and Mr Vaynerchuk) are right and that Care is at the heart of great relationships. However, what I have seen are cases when people and firms really care about their business and their customers but then do nothing about it. My question then would be: How do people know you care if you don’t show it through your actions. In the end, actions always speak louder than words.

      Adrian

      • Then I dont think they really care Adrian — or at the very least – care enough. As you say action is louder than words.

        • Right on! Here’s to more action and less words. As Elvis sang in A Little Less Conversation:
          “A little less conversation, a little more action please
          All this aggravation ain’t satisfactioning me
          A little more bite and a little less bark
          A little less fight and a little more spark
          Close your mouth and open up your heart and baby satisfy me
          Satisfy me baby”

          🙂

  • Pingback: Michael Cowen ()

  • Lol. Strange what Elvis and modern day branding have in common.

  • I think this blog raises a common myth – that most SME operations are better connected to their customers than large operations. This may well have had some credence prior to the migration of so much business connectivity from human contact to online.
    It tackles an issue one of my own interests is currently facing. Makeurmove, where I am an investor and a non-exec. has evolved a lean property rental model and is growing rapdily. However, our mechanisms for existing customer cross-selling, upselling and general ongoing interaction are as yet limited.
    With staff capacity, cashflow and simply keeping up with bills a major priority, it is hard to allocate the time and money to remedy the situation – yet we know we must.

    • HI Malcolm,
      Thanks for your comment and honesty about the venture that you are involved in. Your perspective, for me, raises an interesting question particularly about new and fast growing ventures where even though we know that this is a lucrative area it still doesn’t seem to feature in the business planning and implementation phases of many businesses. Why is that do you think even though we know that it can bear significant returns?

      Adrian

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