Small business owners often believe that providing good service and reliable products will be enough to generate referrals. The reality is that customer focus isn’t always that dedicated; they rarely think about a business until they need to schedule their next service or restock a product. Even then, they may still decide to go where it is most convenient at the time.
To build relationships with customers and continue to be top of mind for referrals, businesses need to implement systems for regular customer contact. Too many of them take their existing clientele for granted and spend their marketing dollars on new customer acquisition, forgetting that if existing relationships aren’t cultivated, they will disappear. Someone who feels no loyalty to a business is a lot more likely to go somewhere where they feel more appreciated.
In their book, No B.S. Guide to Maximum Referrals & Customer Retention, Dan Kennedy and Shaun Buck describe systems for encouraging referrals and customer retention. They reiterate that to cultivate a customer relationship, a business should implement systems to create a sense of appreciation for its customers.
Key takeaways include:
- Keeping a satisfied client is more profitable than replacing an unhappy one.
- Referrals from happy customers are more profitable than looking for new customers through traditional marketing.
The book includes practical suggestions for increasing retention, including a chapter on “money math.” It states that business owners should know how much their customers are worth, how much it costs to get them, and how much it costs to lose them. Systems can then be implemented based on this knowledge, with the steps being surprisingly simple and the results remarkable.
What’s the Bottom Line?
Referred customers are superior to those brought in by traditional advertising, but the majority of business owners will spend more money to attract new customers than to get referrals from existing, happy customers. No B.S. Guide to Maximum Referrals and Customer Retention reminds everyone that the best place to improve your profitability and grow your business is with your own customers.
Using a systematic approach, Kennedy and Buck show you how to grow your business more successfully by keeping, cultivating, and multiplying customers, and reducing income uncertainty through referrals and retention. Their message is clear: when you want to grow, start with what you have.
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