If you want to become a franchise consultant, but you want to own and run…
When you choose to invest in a franchise business, you buy into a brand name with a large, preexisting customer base—this gives you a huge jump-start compared to the slow warm-up that is so typical of new start-ups.
But even with franchise chains, you can’t afford to ignore customer retention strategies. Your location will gain a local reputation over time, and customers will either be pleased enough to keep doing business with you, or not.
Consider that the average business loses some 20% of its customer base every year. Some lose much more. Imagine bailing the water out of a boat with a large hole in the bottom. You can still make progress, but the greater the leakage, the more effort it takes to obtain the same results. But reduce customer loss to, say, 10% per year instead of 20%, and combine that with 20% positive growth, and you could end up doubling your revenues in seven years or less.
Here are five key ways to do better at retaining your existing customers so your overall growth is not hampered:
1. Focus on Friendly, Fast, and Effective Customer Service
Around two-thirds of customer loss is due to poor customer service, while only around 15% is due to poor products or services, and 10% is lost on a competitor simply luring them away with a seemingly better offer. Combine that with the fact that the average customer will be willing to pay around 13% more for the same product or service provided he gets great support along with it, and it is easy to see why this is the number one factor in retaining your clients.
2. Reward Long-time and Lifetime Customers
Offering special discounts, free gifts, and other “perks” to new customers is all too common, but to do that and then suddenly cut off the benefits once you land a prospect is to encourage customer loss. Invest in keeping your customers and reach out to former or “dormant” customers. Advertising response rates are much higher with existing and former customers than with “newbies,” so spend your marketing dollars accordingly.
3. Keep the Lines of Communication Constantly Open
Keep a rolling calendar devoted solely to tracking customer communications, and keep up with both automated and personal communications so your customers don’t forget about you. And you should always make it easy for a customer to contact you—be it by phone, email, text, or in person. Make sure your in-store workers wear distinctive uniforms that mark them as sources of customer help, and have a help desk or other designated customer-assistance area that is prominently placed and marked.
4. Welcome Feedback, Both Positive and Negative
A lot of customer loss occurs silently. People just disappear—and worse, they start talking to other customers or prospects about what you did wrong. It’s far better if you at least are aware of their complaints so you have a chance to respond. Maybe you can’t satisfy every disgruntled client, but many times you can. So use surveys, questionnaires, social media venues, and other methods to gain the feedback you need to improve and prevent customer loss.
5. Get Valuable Advice From Experienced Business Advisors
You may already use business advisors to help with taxes, budgeting, compliance with regulations, and forming a general business growth strategy. But you should tap an experienced shoulder for some valuable advice on customer retention, as well, since so much of your business’s ultimate level of achievement depends on it.
To learn more about franchise growth and proven customer retention strategies, do not hesitate to contact Transworld Business Advisors today by calling 888-920-1852.