How Businesses Survive During Economic Downturns

Customer retention is not only how businesses truly prosper, but it’s how they actually survive during economic downturns and unexpected emergencies. Customer loyalty means a steady flow of income, a flow that can be depended on in good times and bad. No wonder business experts say that when a business increases its customer base by five percent they are likely to increase their profitability by seventy five percent!

Although it’s true that ‘you can’t please everyone,’ business owners need to keep a sharp eye on one-time customers so they can figure out just why such a potentially valuable resource does not come back again. Asking the following questions, and being brutally honest with the answers, can help turn the one-time purchaser into a steady customer:

Pinpoint the date when they bought, and what’s changed since then

Have prices gone up since then? Or have they gone down or stayed the same? Did the customer make any comments, of any kind, to the people he or she interacted with? Was the sale made through a third party, and if so what kind of changes have happened with the third party since then? Was the marketing budget cut since then, or are there new staff that the customer has to deal with? A good business has to change or die, but first time customers don’t always appreciate why or how changes take place in an organization. It’s the job of the business owner to make sure that changes never negatively impact a new customer — otherwise they become a former customer very quickly.

What’s the competition up to?

Companies always know what their competitors are up to, and this includes when new customers come onboard. With consumers watching every dollar they spend and becoming smarter shoppers, there’s always someone waiting in the wings to steal business away by offering something better — or, usually, something that’s perceived as better. When customers disappear after an initial purchase, the smart business owner is going to find out what the competition is offering that might have swayed them — and then offer it himself or herself, or think up something even better to offer.

Is our customer service the best it can be?

There are two guaranteed ways to find out how good the customer service is for any particular company. First, elicit and then analyze every bit of customer feedback. Always offer the new customer something in return for their time in filling out a survey or answering some questions in person — people will really open up if they think there’s a free tote bag in it for them. Secondly, do in-house investigations of customer service. Pretend to be a new customer and find out exactly how they are initially treated. Call in with a question and/or complaint about a company product to find out just how well, or how bad, new customers are treated. Use these finding to tweak the company’s customer service so that customer retention increases. It’s always easier to sooth the ruffled feathers of a current customer than to go out and find a new customer.