Could better customer retention be key to business growth?

[maxpete]

Hey everyone,

I was reading Why Your Small Business Needs a Customer Retention Strategy on the Bottom Line and it got me thinking about how many businesses may overlook implementing customer retention strategies for their needs. 

What's been your most successful customer retention strategy as a business owner? How did you implement it?

I'm excited to read your replies!

[maxpete]

Tagging in @dcon, @zder, @LukeNieuw, and @grovetealounge to get the conversation started!

[LukeNieuw]

Having a retention strategy is MASSIVE and it's something I didn't appreciate enough before.

The cost of acquiring a customer is, in most cases, much higher than the cost of retaining one. 

In years past we tried different gimmicky type things to get people to come back or spend more on their visit. We used business card style coupons with incentives to come back or to use in another part of our business. They seemed to help but tracking everything had its challenges.

Now we've been using Square Loyalty since 2020 and when I first found it I was in heaven. It was something I'd always wanted to have built right into the POS and super important that it was FAST & EASY for my customers to opt-in and understand and easy for my staff.

We went all-in with the Loyalty program giving 10% cash back, how we do that I will explain later, it works amazingly well, automatically provides incentives to anyone who spends a $ with us and we get some incredible data that was impossible for me to capture in the past. 

We see on average our Loyalty Club Members spending over 200% more than those that are not in the club and visit us 10x more! The beautiful part is the reward achievements and text reminders all happen automatically and our customers LOVE it! It's quite frankly the best marketing tool we have.

I've had some people ask how we give 10% back with the program and here's how. We use the "$ spend" for points accumulation aka "Whisky Bucks" at our business (Whisky Run Golf Club), then I create $ amount rewards that would be 10% of their spend. An example would be spend $100 and unlock a $10 reward. Now 10% may be a little crazy but that's what we like to do. You could probably have similar affects with 5%, Shoot the credit cards don't even give that much 😉 The program sells itself and we've seen opt-ins be as high as 80%.

We keep the program very simple and we don't restrict what they can use their rewards on. This makes it very easy for customers to digest and they actually are pleasantly surprised because most of their other loyalty programs restrict where and when they can use rewards. 

[maxpete]

Thank you for sharing this and totally agree the cost of acquiring is a lot more!

[Lovewell]

This was a great read! 
We always talk about this. Especially with the push to be “viral” on social media we often ask ourselves… but are those people actually coming into our business and coming back? 

HUGE thing would be obviously creating a memorable and genuine experience. We try our absolute best to connect with each customer that walks in. Getting to know THEM and removing the spotlight off of us. That creates and space where people feel like coming back because they remember feeling safe. 

SQUARE LOYALTY AND MARKETING‼️

Can we shout this from the rooftops? 
It is in the name. Maybe it’s loyalty to us maybe it’s the free drink at the end of it but either way that means we saw them at least 9 times before their free drink! It feels so special especially now when money is so tight for people. Also updating through emails people on the shop happenings brings them into the know and reminds them that they are part of the story too. Of course we throw in a little coupon at the end to remind them we miss them. 

We have some of the most loyal customers. It blows our minds sometimes! Also oddly enough, MERCH. It’s the people that are so loyal they willingly spend their money to wear your name all around town or on their travels. We are not the “cool kids club” by any stretch but people are part of the Lovewell fam and are so proud to share that. 

Our soap box is CUSTOMER SERVICE (which often is bare minimum and makes us think of a terrible phone call with a credit card company or something) so we go beyond customer service and make it feel like home. 
“People may not remember what you said but they will remember how you made them feel” rough quote of Maya Angelou. 

Now- still somehow people are insanely loyal to Starbucks? (The local

coffee shop alternative sorry if you’re a ⭐️💵 fan) You may not feel superb after your experience but you know what you did get? STARS! Free pastry. Points for a free sparkly cup. Those perks create loyalty. 

So yeah- short answer: be really freaking kind and reward people for supporting yourself, your family, and your employees. SQUARE LOYALTY ⭐️⭐️⭐️⭐️⭐️ 

[maxpete]

You know you can tell when people just get it, and @Lovewell you get it!! 

Big kudos to you!

[GourmetOnWheels]

For me it is Square loyalty, but from June to September after covid my business is in the crapper. As 85% of my clients are on vacation for months, they are wealthy clients.

So I hope to see more action trickling in as LA Unified is starting school again. So I will move some customers up to 9 or 10 loyalty points

René

[CareyJo]

This is a great article and sounds a lot like some of the books we've read in Square Book Club 🙂

As an HVAC company, we can't do loyalty programs, it's not like we sell a commodity that customers want to purchase daily or weekly.

However, we do have a lot of repeat clients and have for many years.  We offer preventative maintenance contracts for both commercial and residential clients.  This guarantees us repeat business so that we can maintenance the equipment.  It also means that when equipment ages out, we're the first ones to recommend replacement and get the benefit of replacing it, adding additional income.

I also do thank you gifts for our biggest clients throughout the year as well as new installs.  They will usually come back to us for service because we installed the equipment.

[maxpete]

Thank you gifts are so underrated and important! So awesome to hear you doing this and learning more about your retention methods! 

[dcon]

Great insights here! Sorry for slow response, this thread was a great read.

One big part of this is how to actually measure customer loyalty with hard metrics like retention, churn, and LTR. From there, much easier to compare and interpret the effects of different menu items, seasons, initiatives, etc.

I think there's a lot of interesting design work to do with measuring the effectiveness of loyalty programs by comparing customers that participate vs opt out. Could even go as far as a/b testing different loyalty program styles by store location.

For context, I'm coming at this from the data science side, and currently working on some tools to hopefully make this type of work much easier!

[maxpete]

Love this approach and mindset, super fascinating!