Members of the scheme accumulate points worth 5% of the amount they spend and every January and July are sent a money-off voucher to spend at The Garden Pharmacy. About half of its online customers and a third of in-store customers are now members of the scheme, and every six months 8,000 of them qualify for vouchers.
Ganz said: “The feedback from customers is fantastic. People come in waving their vouchers. January used to be a very quiet month for us, but we now get a nice peak of business as people come in to spend them. This happens even with people who have forgotten about us. Four months later they get a voucher in the post and it brings them back into the shop.”
Customers are a company’s most important asset, so as you grow your business, it is vital that you think about how to hold on to them.
Andrew Ground is customer-marketing director for J Sainsbury, the supermarket chain that has come under fire recently for failing to address the needs of its customers properly. Ground said that if you wanted to keep your customers you needed to take every complaint seriously.
“It’s really important for people at senior level to look at things that go wrong for your customers. The inclination may be to glaze over the complaints but it’s important to understand what caused them, and then to fix things quickly.”
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He said that if Sainsbury received more than 10 complaints about a product, the matter would immediately be referred to someone at a more senior level. The level of complaints about that product would then be monitored week by week to see how quickly the problem was fixed.
Ground said it was also important to make sure you had dealt with the root cause of the complaint.
He explained: “It’s easy to lump things together that sound superficially similar but which have different causes. A classic example for us is when people complain that we don’t have a certain product in stock. It might be because we don’t sell it in that store, or it might be that the product wasn’t there that day, or it might be that it was in the store but had been moved to a different aisle.”
If a business really wants to hold on to its customers, it should also assess what service the company provides that is really important to customers — and what is less so.
Ground said: “There are always a lot of services a business can offer but in any business there are a few things that are disproportionately important to the customer.
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“For example, in the supermarket industry the most important things are availability and checkout service.
“We offer other services, such as providing special bags for the mushrooms or having umbrellas available when it is raining, but these are all less important than whether the products they want are on the shelf and whether they can get through the checkout easily.
“The same is true for any business. Make sure you know what your customers really want — and then prioritise.”
Daniel Ronen, director of the Portman Business Consultancy, said the secret of growing your business successfully was to focus your energies on keeping the customers you already had.
He said: “It’s six times more expensive to sell something to a new customer than it is to sell something to an existing customer. Usually small businesses look only at how to get new customers through the door, but the trick is to balance that with looking at how you keep existing customers and sell more to them, because that is far more cost-effective.”
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Ronen said: “What you are trying to do is build and develop a long-term relationship. To do that, it is critical that you find out what the customers’ needs and desires are — not just what they are looking for today, but also in the future, so that your company can start to become part of their big-picture plan.”
He said that the way to find out what your customers wanted was simply to ask them.
“Invite them to a breakfast discussion session and ask them what they like about you, what they don’t like, and what they would like you to provide for them.
“They could come up with ideas that make their lives easier and give you more business. Listen to what they need and want and act on those requirements. Then, once you get to know the customers well, offer them things that would interest them specifically.”
Russell Warner, group commercial director of Eurofactor, a finance firm, has started up two businesses of his own. He said an important step towards keeping your customers was to arrange your business so they had a single point of contact with someone who could provide a one-to-one service.
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The next step, he said, was to find out as much as possible about the industry in which your customers operated so they felt confident that you really did know what you were talking about.
He said: “If you come across as somebody who has knowledge and expertise in their market, you can look at where they are going and also perhaps provide them with guidance.
“If you can provide them with additional support and be a friend to them, they are more likely to ask you questions. And that gives you the opportunity to provide them with further information.”
So what happens if, despite your best efforts, a customer decides to leave you and go elsewhere? Warner said: “Ask him why he is leaving. If the reason for going is price and it’s not possible for you to deliver the service and still get a commercial return for yourself, then you have to be honest and say ‘fair enough’.
“But it’s important to understand why a customer has made that decision so you learn from it. You can’t get it right all the time. Sometimes you will make mistakes, and the only way you can rectify them is by finding out from the customers what you need to do to put it right.”
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Useful links
www.dti.gov.uk/bestpractice/sales/cust-services.htm
www.businesslink.gov.uk/sales
Next week: Taking on staff