Why Small Businesses Must Make Customer Retention a Marketing Priority Now and After COVID-19

Updated: Mar 8

To say that it’s a wild time to be a business owner is clearly an understatement. My clients feel the pressure. I feel the pressure. You, reading this, feel the pressure.

Yet, despite all the confusion, stress, and fear, we remain entrepreneurs. And a “wild ride” is basically what we signed up for, isn’t it? No matter what life throws at us, we’re problem-solvers, creative strategists, and optimists.

That’s why it’s important to support business owners now with actionable things they can do to better prepare for tomorrow, for what I’m terming a post-COVID-19 relaunch.

My premise is that during and after this pandemic, most aspects of our businesses—from our positioning to our processes and systems—will need to re-align with our new reality. That’s what my thinking and writing is focused on right now: how to plan for a successful and sustainable re-launch.

In my last post, I encouraged you not to discontinue marketing efforts during the pandemic. I also discussed your need to re-think your marketing approach. Today, I want to explore that further.

The shift to customer retention

Are you familiar with the "Customer Relationship Management Cycle"? It’s made up of three systems:

1. Client Attraction (i.e., Marketing)

2. Client Acquisition (i.e., Sales)

3. Customer Retention (i.e., Customer Service)

My prediction and recommendation? After COVID-19, smart small business owners will pay more attention to part three of this cycle: customer retention strategies for business development.

Marketing a small business to new customers can be so expensive. Retaining them is much more cost-effective. For small businesses with modest marketing budgets, reducing churn will lead to sustainability.

When we think of business development, we often get fixated on Client Attraction. What doesn't get nearly as much attention is Customer Retention. But just like with your Marketing and Sales, you should have a system and processes to support your Client Retention efforts.

Sure, people say they have great customer service...but do they truly have a system for ensuring that greatness? Is that system optimized for KPIs like retention rates, word of mouth referrals, and upsells in a product value ladder?

Tips for building a Customer Retention System

First, maintaining a good Customer Retention System is like maintaining a good conversation. From the moment you onboard your client, you’re listening, responding, and generally being available. Customers always feel “in the loop”.

If you can’t provide a quality experience for customers and run a tight operation your customer retention will fall short somewhere along the way.

Here’s how to start and maintain that conversation:

1. Create a communication strategy for the unforeseen

If you didn’t have one before, you need to have one now. When something goes wrong-- whether that’s a pandemic or something in your own system breaking down--you need to address it. Right away, and in the right way.

For example, if the value that you provide for the customer has changed because of COVID-19, acknowledge it. Reset expectations for what you are now offering. If you are pivoting your business, you need to anticipate the questions and concerns that will arise and have really great answers, ones that will make your clients feel they are still being well served. Above all else, remain trustworthy, transparent, and honest; It’s for your own sake.

2. Manage complaints with consistency

As we emerge from COVID-19 and expectations shift, the customer complaints you receive might change. In volume as well as in tone.

It’s important to remember that complaints aren’t “problems”. In fact, they’re usually an opportunity to grow as a business, and to nurture more trusting relationships with customers. But to position yourself for success, it’s best to have a process for managing them.

Here’s what your process could look like:

1. Get the full story.

2. Identify the true problem so that you can clarify any misunderstandings.

3. Identify the resolution the client is asking for.

Note: this does not necessarily mean we give the client the exact resolution they’re looking for. But we do need to understand what they want so that we can communicate what is and isn’t possible.

4. Propose a resolution.

5. Assert the decision and highlight the benefits of the decision.

I recommend creating a template for whatever process you create. This allows all of your team members to practice it consistently.

3. Incentivize word of mouth

Helping your customers become your brand advocates and increasing referral business is a truly cost-effective strategy. So, how can you incentivize people to share your service? What truly motivates your customers?

The typical incentives are:

  • A small discount

  • Access to a premium feature

  • Double-sided incentives that reward the referrer as well as the purchaser

And then there are creative incentives:

  • Gamification of the referral experience for your customer, tantalizing them with the prospect of attaining higher levels

4. Automate after-sales care

After the sale is made, you can automatically check up on satisfaction levels. Of course, you can use an emailer program, but don’t stop with just a survey. Instead, use automation to segment the responses.

For example, if a customer responds with a satisfaction rate of higher than 8 out of 10, why not engage them in your referral program? And what about those who score 5 -7, or those under 5? Think about the process you need to put into play to address these different outcomes. At what point in your after-sales care do you want to pick up the phone? Address challenges early on, and you will increase retention.

5. Create touchpoints that will delight your customers

This means giving your customers something memorable. An experience, thought, or feeling they can’t get anywhere else. Why not send them something unique to celebrate their wins when they hit milestones? I mean...what if you sent singing quartets to their office? Wouldn’t that leave a lasting impression, a story to tell their friends and colleagues? Just look for opportunities to nurture real human connection between your clients and yourself. More so now than ever, people want to feel connected.

Plan for a sustainable and successful future

I know that running a business right now is beyond challenging. I’m sure the thought of planning for the future…of planning for a truly different future is totally overwhelming.

But what can I say? Your hard work is worth it. Your business is worth it. You’re worth it.

Your re-launch plan doesn’t need to feel overwhelming. Start with one thing in your Customer Retention System that will make the biggest difference. Then move onto the next. Baby steps!

As I’ve said before, we’re an integrated part of what will hopefully become a new, thriving post-COVID economy. I truly look forward to participating in that future with you. But to get there, we need to keep learning, keep growing and keep supporting one another.

Re-launch. Re-visit how you do business development. Explore new systems like Customer Retention Processes. Create a viable roadmap in these uncertain days. That’s where you and I are going.