InSight

Exit and Growth Strategies for Middle Market Businesses

The Importance of Customer Appreciation

By Kim Levin | Jul 08, 2014

Thank youAnalysis shows the cost of acquiring new customers is 5-7 times higher than the cost of retaining established ones. Yet, often times, a customer appreciation expense is one of the smallest line items in the company budget.   If used effectively, however, this investment can have a dramatic impact on a company’s bottom line. Customer appreciation is one of the major factors customers consider when returning to a business. Showing customers how much you appreciate their business can turn them into regular clients. The most obvious way to show this is by verbally telling them, “Thank you for your business, we hope to see you again.” And, remembering names, as well as preferences with your products and services can go a long way toward showing your customers that you appreciate them.

Customer appreciation is a measure of a company’s outward efforts toward its customers. It reflects a proactive approach to engaging customers that make a difference in your company. How a company shows appreciation varies based on the services and products that it offers. One way to show customer appreciation is through ‘customer appreciation days.’ In fact, a newer trend that has been developing is the idea of expanding customer appreciation days to benefit the entire community. Another way that companies are giving back to the community as a whole is by having their employees volunteer at local charities and non-profits in the area where their business operates.

If your company is one where you are involved with other business professionals on a regular basis, an appreciation event where you bring in a guest speaker could mean a lot for you and your customers. The goal would be to have someone speak who can provide an opportunity for you and your clients to learn something that will help them run their businesses better and hopefully enhance their lives.

Even though large annual events can be an effective way to show your appreciation to customers, it is important to show appreciation for your customers on a more frequent basis as well. This can be through loyalty or rewards programs, as well as giving customers incentives for referring others to your business. Rewards programs that reward frequent visits can encourage customers to purchase items more frequently if the reward they receive is something they value. Another way to interact with your customers more frequently is by sending out quarterly newsletters with a new promotion or a gift included in each. If your company keeps records of your customers, some information that could be useful is the dates of your customer’s birthdays or anniversaries. Receiving a gift from you on their birthday or anniversary lets your customers know that you truly care about them.

In an age of globalization, online shopping, and social media marketing, a back to the basics approach in regard to your relationship with your customers can set your business apart in an increasingly competitive environment. The most important thing to remember through all of this talk about appreciation is to be sincere. As a business you have to truly care about your customers. They can tell when it is from the heart and they can tell when it is not genuine. It is important to be unique in how you show appreciation. Figure out what will make them feel they are important to you, and then strive to create a culture that proactively seeks to let customers know how important they are.

Posted by Michael Weiss.

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