Are your customers telling you the whole truth?
No matter the kind of business you own, customer retention is vital to your overall growth and success. It’s easier and more cost-effective to retain customers than to acquire new ones. Returning customers spend more and buy more often. They also refer friends and family to businesses they love. Only a 5% increase in customer retention can increase company revenue by 25-95%.
In this article, we’ll explain why customer retention is so important. We’ll also discuss the costs associated with turning one-time customers into repeat customers. Plus, we’ll share some strategies for customer retention.
Follow these tips to start increasing your revenue today.
Customer retention is a cornerstone of business stability
Customer retention refers to the efforts and actions companies take to maintain a customer relationship. The more effort you put into your customers’ experiences, the more likely they are to become repeat customers.
Repeat customers are a sign of successful customer retention. Your efforts, along with their positive experiences, will bring your company to mind when they need service again.
Why is customer retention so essential for remodelers? For one thing, it allows you to scale your business. Repeat customers create a steady business and income flow. It gives you financial stability on which you can build more revenue with new customers. The time and cost savings allow you to invest in other marketing channels to continue growing your business.
It costs five times more to bring in new clients than to retain your existing ones.
How does that work?
- Returning customers promote your business.
- Returning customers spend more money.
Over the last six years, customer acquisition costs have increased by 60%. Therefore, it’s extremely important to work smarter, not harder, to retain customers.
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How customer retention works for remodelers
So, what does customer retention look like for remodelers? After all, you’re not selling a product that can be repurchased repeatedly.
Say you build a family room addition for the Smith family. All goes well, and now they’ve not only brought a new baby into the family, but the parents need an office to work from home. They’ve decided to finish their lower level to include an office, play space, and study area for the school-age children.
Because the Smiths were so happy with their addition, you’re the first person they call about the next remodel. After a brief meeting, it’s easy to put together an estimate for them because you already have their home floor plans with all the measurements. You know their tastes, so you recommend flooring, paneling, and other finishes that match the family room.
The family hires you to do the second remodel, which goes even better than the first one. You make more profit because it costs you less to secure and execute the project, and this remodel is more sizable than the last one. Plus, the Smiths now recommended you to their neighbors who want a similar remodel in their home. You’ve got a new client without any acquisition costs, which is exactly what you want.
Tips for improving customer retention with your remodeling business
As a remodeler, you love helping people’s visions come to life. You want every customer’s experience to be so wonderful they think of you when they have another project in mind.
These tips will help solidify customer relationships and improve customer satisfaction. This will increase the likelihood of retained customers over time.
Solve problems that no one else can
One way to get a customer to return is to help them with an issue they haven’t been able to solve with other professionals in your field.
For instance, perhaps you designed a clever way to create a back entrance for the Smith kids and their pets. This will keep the mess out of the house and give them a place to drop all their gear. You’ve created a solution to their problem, which is what customers are looking for.
Practice community involvement
As a remodeling business working on properties in your area, you are (or should be) a part of your community. Be sure to let people know your mission to beautify the properties you work on and your commitment to social causes or local charities.
Make social responsibility part of your brand so customers feel good about using your business repeatedly.
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Offer recognition for returning customers
When customers return to you for another remodel, be sure to thank them appropriately. It’s important to acknowledge that you remember them, and you are happy they are back. Be sure to thank them in conversation or in writing for returning to your business or for referring another customer.
Take advantage of customer surveys
If you’re not sure what brings customers back to remodelers or what they’re looking for, think about conducting a customer survey. Possible things to inquire about:
- How many contractors did they receive bids from?
- How did they choose you?
- What did they like about your service (customer satisfaction)?
- What do they think you could do better?
- How likely are they to recommend you to someone else?
- Would they hire you again for another remodeling job?
- Did they feel like they got their money’s worth?
Provide reliable and professional service
Finally, make sure to create a service policy early on. Require all staff to be reliable, punctual, clean, respectful, and cost-minded throughout every job. If you offer top-notch service, your business will get high marks on that customer satisfaction survey.
Final Thoughts
A growing list of new customers is a clear sign of business success, but so is maintaining existing customer relationships. As long as you’re keeping the customer’s needs in mind, they’ll be happy to use your services every chance they can. Make the effort to solidify your customer retention now, and you’ll be thanking yourself later.
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