According to a study conducted by Common Sense Research, it is about a bajillion times easier to keep an existing customer than to find a new one.  I'm not sure how reliable that number is, but the fact remains that your current customers are your most valuable asset, hands down.  Over the years, I have spoken with numerous business owners about customer retention, and these are the three points that keep coming up:

1.  Stay in contact.  The only correspondence most businesses have with their customers is through billing.  Ugh.  If you want to build customer loyalty you'll have to do better than that.  People can be awfully fickle these days, and some

customers migrate from business to business based solely on the current discounts offered.  Marketing those current promotions can be very expensive (yes Groupon, I'm talking about you).  Instead of going that route, you may want to try giving your promotions out via an email newsletter or a Facebook or Twitter account.  The next time you make a sale, invite your customer to join your mailing list to get your promotions directly.

2. Make sure they can find you. Nothing is more frustrating than having a customer stumble across your competitor while trying to find you.  That means that in the phone book, it is very important that you stand out in every heading where that customer may be looking for the services you provide. Online, it may be as simple as filling out your company's profile on Google Places.  It's free and it will almost ensure that whenever a client types in your name on Google it will bring your profile up. If you haven't set your business up on Google Places yet I suggest that you do it today.  To set up your profile, click here.

3. Go the extra mile.   It is a no-brainer that you should treat your customers like the gold they are. If you give them an amazing experience and make them feel like they got a great deal, they will reward you handsomely and will keep on coming back. 

The hard truth is that no matter how much your customers like you, you will lose 20% or more of them each year due to people moving, businesses failing and other causes well beyond your control. You always need to advertise for new customers to make up for that loss, but new customers can turn into longtime customers themselves. If you do a great job for them, they will start telling their friends about you, and your initial advertising investment will compound in a big way.

Thanks for your business,

Reed

Previous Month's Answer

There is a water lily growing in the center of a round pool. Every day it doubles in size. After 20 days it will cover the entire pool. After how many days will it cover half of the pool?

19. I know a lot of smart people that got this one wrong. The answer is actually very simple. The water lily doubles in size every day and reaches its peak at 20 days. Therefore at day 19 it would cover half of the pool.