Ask a studio owner about their customer retention initiative and most will give you a blank stare in return. What is most often missed is the simple fact that just being focused on customer retention and how it relates to your studio can be a life-line when it comes to taking things to the next level in terms of studio productivity and profitability.
Customer retention has everything to do with keeping customers engaged and from going to the competition. A happy customer is one that is being retained by the current studio. There isn't a thought of ever leaving to find greener pastures.
Did you know that a 1% increase in customer retention enhances a company's value by about 5%? Did you also know that businesses can boost profits by almost 100% by retaining just 5% more of their customers?
So how can customer retention make a difference in your studio's operation? Let's take a look at what I call The Five Secrets to Effective Customer Retention:
Secret #1 - Know Where You Are Now
Where do you stand at this moment in time concerning customer retention? Are your customers truly happy with the customer service and product that you offer? Have the majority of them stayed with you for a good period of time? Could things be better in this regard and if so, how? How would this tie into making and continuing to keep your customers happy? What has worked in terms of customer satisfaction and retention thus far? What hasn't and what could be improved?
This might seem like a lot of questions but each one is something you might want to spend a little time considering. The questions ask you to take a snap shot of your present circumstances concerning customer retention. In order to take things to the next level in this regard, you have to have a good idea as to where things stand now.
Secret #2 - Listen and See What's Happening Around You
This is a good tie-in and follow-up to Secret #1. If you truly want to take things to the next level when it comes to happy and loyal customers, you need to have an excellent understanding of what's on their minds now. Has anyone made suggestions of what they'd like to see that might end up creating even more satisfied customers? A satisfied customer is one that will be loyal to you and end up staying with your studio for many years to come. In order to win more of their loyalty, you always need to keep one ear to the pavement to understand what they like...and what they don't.
Many studio owners will create questionnaires that ask for feedback as to how things are going now and what it might take to create more satisfaction and loyal in the future. Studio owners often forget the fact that some of the best ideas for creating loyal customers come from those very same customers!
Secret #3 - Create to Show Excitement and Movement
When you have a new customer retention initiative in mind, take the steps necessary to introduce it to your customers in the easiest and best way possible. Be organized and troubleshoot all of the "what ifs". When creating a program, make it fun and easy. These are two very important components to keep in mind. Without them, programs often crash and burn shortly out of the gate.
Let your staff know exactly how things will work and what to do and say in all possible situations regarding this new program. Communication is key in any customer retention program.
Here's an example of a loyalty plan that a studio put into operation successfully not too long ago;
The business offers participants a Loyalty Card. There is no fee for the card and everyone gets one when they register for classes. Students are asked to bring the card to each class during a season. The card is validated at each class. After the tenth validation, the next class is free. When the card is full, another card is then given to the student. This second card promises free lessons on the sixth and twelfth lessons. Bear in mind that this type of a program may or may not work for your studio, but at least you get the idea.
When your program is ready to go, make sure there is excitement and anticipation generated when your studio starts promoting the program. An effective advertising campaign doesn't have to be costly, just fun and anticipatory.
Secret #4 - Effective Customer Service Seals the Deal!
How is the customer service at your studio? On a scale of one to ten, how would you rate it? Customer service goes a long way in creating loyal and satisfied customers. It's the glue that holds everything together in a most successful way. If your studio has customer service issues, do your best to fix them as soon as you can. Picture a boat that has a leak. As long as the valuable fluid of customer service is leaking from the boat, the boat will at some point sink. And so it is with your studio. You can't hope to create any kind of customer retention on a greater scale without effective customer service being alive and well at your studio.
Studies show that the number reason why customer are loyal is the staff. Yes, you read this right, the staff! Never forget the following equation;
Happy staff + Happy customers = Customer retention!
Many studios also create staff retention and loyalty programs just for this reason.
Secret #5 - Oh Go Ahead...Do It!
Not sure if a customer retention campaign that you want to put into place will work? The only way you'll ever find out is to take the risk and just do it. Just make sure that it is well thought out, fun and will create the results that you intent it to create. Meet with your staff regularly to get ideas and how to put them in place. Make a plan and follow it step by step. Be loyal to your word and get it done. If you should fail, get back up on your feet and try a different take on your idea or another one entirely.
You know what your customers want better than anyone else that might be outside of your studio looking in. You're a creative soul otherwise you wouldn't be in this industry in the first place. Use your creativity to establish a customer retention program that is easy, fun and profitable and you'll never look back again. Make it unique and different. Something that no other studio within your marketing area has. This will cause your studio to stand out and "buzz" will be generated, which also happens to be a very affordable type of marketing.
Always remember that it's the journey, not the destination. Have fun getting there. That's what running a studio is all about. Come to think of it, isn't that what life is all about as well?