One Hour Per Week — Customer Retention Guide

Customer Retention Guide for Small Business - Paul Madden

As a solo entrepreneur or any other form of small business owner/manager, you’re up the walls wearing multiple hats to keep your business running. You’re a part time bookkeeper, the front line sales department, stock controller, order processor, customer service department and you are probably juggling family life at the same time. Marketing is a luxury you don’t have time for — but just 1-hour per week can transform your customer retention rate and allow you to start thinking more about how to work on the business, rather than spending all your time working in the business. 

 

It’s a long established rule of thumb in business that acquiring a new customer costs 7 times as much as retaining an existing customer, so making time to build customer loyalty is worth the effort.

 

This practical, no-nonsense guide will give you the nuts and bolts of how to build a basic customer retention strategy — at zero financial cost. Of course, you’ll still have to find that one hour per week, but that’s up to you. 

Who is this aimed at?

This is aimed at people who own or manage a small business and want to build greater loyalty amongst existing customers — solo entrepreneurs, founders etc. working across retail, services, hospitality, trades, agri-business, wellness, creative industries, tourism etc.

Week 1: Personas — Profiling Your Ideal Customer

Starting out, any customer might feel like your ideal customer but you want your highest margin customers to keep coming back, so spend 1 hour doing the following: 

 

  • Look at your existing customer base and identify the top 3-5 customers (in revenue terms)
  • Create a basic demographic profile of the specific person that bought from you
  • Ask (them preferably) the following questions:
    • What do they buy?
    • Why they chose your business?
    • Why do they come back?
    • What problem do you solve for them? 
  • Document the answers somewhere e.g. Google Sheets, Evernote etc. 
  • Based on your findings, draft a “Why Choose Us?” message to include on your website and social media. 

 

This initial research will become the basis of your marketing messaging and offers going forward. You may refine it and change it over time based on newer information but this initial data is the start of your data-driven marketing strategy. Knowing and targeting your sweet spot customer should increase the likelihood of retaining that customer in the long term. 

Week 2: Get Found By Matching Personas

Based on the work done in Week 1 you should have identified a pattern in how your ideal customer finds your business. Do they do a Google search for local services? Do they rely on word of mouth? Do they ask ChatGPT?

 

You know the type of person you are after, so now you need to be visible where they are open to hearing about what you have to offer. This could be a local newspaper, a shopping centre bulletin board, Google search, social media platform. There’s no one-size-fits-all approach here, there’s an element of research and trial and error but limiting the focus to one channel initially eliminates the likelihood of getting distracted and then overwhelmed by the effort.

 

Spend one hour focusing on just one channel. How can you maximise visibility to your target audience through that single channel? 

 

Very often at this point, the knee-jerk response is to spend on digital ads. “It works for other businesses like mine, so I’ll give it a go.” Digital ads has plateaued in terms of effectiveness, it’s a crowded marketplace and that effectiveness will diminish significantly based on a recent EU ruling that tracking-based advertising is illegal

 

There is an element of trial and error here, particularly on a low budget but one route worth pursuing is a Google My Business profile which will help your business appear in location based searches.  

Week 3: Build an Audience

Social media platforms change their algorithms, regulation impacts digital advertising. Relying on these channels as your sole marketing effort comes with risk. The tried and trusted tactic that is email marketing is a lower risk, higher return alternative. Everyone still uses email and  email marketing still has higher conversion rates than any other channel — this is a proven statistic year after year. 

 

Spend the hour this week creating a free account on MailerLite or MailChimp (or you may already have an alternative platform) and create a monthly newsletter with a sign-up form on your website as a starting point. This newsletter doesn’t need to be a masterpiece, just give the audience an insight into how your business works each month — remember whether a new or existing customer you’re trying to earn greater trust — with simple tips, a behind the scenes look at your business, a customer success story or a special offer. 

 

Open rates and click rates will indicate whether or not the content of your newsletter resonates with your target market. If your audience is growing month by month, then you have a readymade audience to pitch new products and services to. 

Week 4: Reward Regular Customers

This will depend on your type of business but rewarding repeat business (and making that visible in your newsletter) increases the likelihood of other customers following a similar path. This might be a simple service add-on or freebie but itemising the reward in an invoice and highlighting the financial value of the reward (however small) creates a satisfying sense of gain for the customer. They feel appreciated and remember the gesture. Over time, you may build these one-off gestures into a  loyalty program with exclusive offers, discounts or gifts for your most valued customers. 

 

Take an hour to consider a simple add-on or freebie that you can give your customers to differentiate yourself from the competition. Bear in mind the personas you created in week one when coming up with a reward that they will value. 

Week 5: Get Reviewed

The most powerful tool for any business is word of mouth. You’ve created your personas in Week 1 and what you want now is for those personas to tell their friends and anyone else who will listen. 

 

The best way to amplify this word of mouth effect is through online reviews on Google Reviews, Facebook Reviews, TripAdvisor etc. 

 

Some business owners freeze in fear at this point. What if? If this makes you uncomfortable, it’s very important to ask ‘why?‘. Do you fear a bad review? If so, why? Tackling this fear head-on is key to building customer loyalty. If you turn a blind eye, negative reviews will come along eventually anyway, so it’s best to be proactive about reviews— spend an hour this week asking your best customers to give you a review on Google Reviews (or another platform). 

 

Make this a ritual part of your customer interactions to build a strong online reputation which attracts more loyal customers to your business. 

Week 6: Rinse & Repeat

At the end of 6 weeks — and just six hours of focused effort — you should be seeing visible shoots of progress in customer retention. Customers engaging with your loyalty rewards programme or taking the time to give you a positive online review are indicators that your efforts are paying off. This may not result in a dramatic improvement in recurring sales immediately but it’s a gradual compounding effect which delivers value in the medium to long-term and proof that you are going in the right direction. This gives you a little bit more confidence to either invest (i) more time going deeper into customer retention strategies each week or (ii) committing a small budget and hiring a specialist (e.g. a digital marketing expert) to help you to take your customer marketing effort to the next level. 

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