The most profitable businesses are that way because they have a high degree of repeat business and long term customers. “Time is money”. Time spent finding new customers can only have a positive return on investment when that customer is nurtured into becoming a loyal long term customer.

8 reasons why long term customers are more profitable.
• Commonsense - The cost of managing long term customers is less (you do not have to spend time and money on finding new ones)

• Long life customers are advocates and create new business by advertising your business to their friends and contacts

• Referrals are the strongest leads and most likely to be converted into a sale. People are more likely to go with a product or service that someone they know has already experienced.

• Long term customers are not price sensitive – they want your service and are happy paying for it

• A first time customer generally expects discounts as opposed to repeat customers

• Repeat customers allow you to up-sell as well as cross-sell products

• The extended lifeline of your customer is directly and positively proportional to increased profitability

• Profits for return customers increase over a period of time

If you are in a small company, chances are that you don’t have the working capital and resources to constantly invest in seeking fresh leads, therefore careful management and retention of existing clientele becomes even more important.

So, now that you know how important it is to create and nurture long term customers, how do you go about it?

You as a business owner need to really know your customers. The more you know about your customer, the more targeted your marketing can be to them, which in turn deepens their engagement with your business and makes them more likely to enjoy the experience of dealing with you. As mentioned above, a deeply engaged customer will not only be more likely to purchase more from you more frequently, but they will also market your product for you through referrals. 

There’s a lot of information that you need to hold for each customer – including contact details, when and what they have bought, any issues they may have had in the past, their level of product knowledge and other information needed in the sales cycle. Most small businesses manage this information in an access database, which we know tend to be unstable, cumbersome and only available locally.

The better alternative is to use a Customer Relationship Management system or CRM. Used properly, CRM systems can greatly assist a business in developing great relationships with their customers. Traditionally they been expensive and overcomplicated, however lately web based CRM systems have been popping up that are suitably priced and functionally perfect for small businesses. A great example is Dimension CRM which requires no hardware or software installation, comes with a low monthly fee and no contracts.

A good CRM such as Dimension will assist you in determining your customer relationship management strategy and making the most of it. Dimension has strong inbuilt features that allow you to manage repeat customers at a single point within the system and allowing multiple levels of access if required.

Easily understood reporting indicates the likes and dislikes of your customers which further allows you to analyse his shopping habits and understanding what he sees in your business and draws him to you. This helps you to plan your approach when selling and handling your client.
If you’re still unsure about how a CRM system would benefit your business, why not sign up for a free 30 day trial with Dimension CRM. Your customers will love you for it.