8 customer retention tips when you have to raise your prices
From electricity and petrol price hikes to rising interest rates, Aussie small businesses are facing tough trading times as the cost of doing business jumps. If you are one of the business owners who has had to charge your customers more or expects to do so in the future, read on for customer retention tips.
In June 2022, 45% of small businesses said their operating expenses had increased.
About the same amount expected further increases in the next six months, according to the Australian Bureau of Statistics (ABS).
The ABS also recorded the largest rise in retail prices since the introduction of the GST in 2000 — a 1.7% rise in June and a 1.8% lift in March.
But don’t worry — with a little extra effort, you can keep your customers coming back.
These 8 customer retention strategies really work
We’ve compiled eight tips for keeping your customers from leaving when you have to raise prices.
1. Be honest
No one is going to rejoice when their local coffee, lawn mow or loaf of bread gets more expensive.
However, while you won’t have customers thanking you for raising prices, you can try to limit the fallout by being up front and honest.
A brief note on your website, sign in the door or a post on your social media explaining the price hike can remove the risk of any confusion or surprise at the checkout.
2. Reinforce the value of quality and local
Our second customer retention tip involves claiming the home town advantage.
Small businesses may not always be able to compete on price when it comes to matching big businesses, but there are ways to reinforce your worth.
Showcasing the quality or uniqueness of your products or service can remind customers that they may be paying more, but they are getting more bang for their buck.
A 2019 global survey of consumers from KPMG found product quality was the most important factor to keeping customers loyal to their favourite product brands.
Educating your customers about your value doesn’t have to be overly involved.
When you feature products on your website, email marketing or social media, consider your unique point of difference.
- Are your products handmade? Are they locally made?
- Is there a great story behind the supplier you can share? Are your products of superior quality or different materials to mainstream suppliers?
- Is there a limited run of your product, making it especially unique?
Emphasising your local connection is a great place to start.
Research from the National Australia Bank in June found 34% of consumers were now more mindful of supporting local businesses in their area and 35% were more conscious of buying Australian-made rather than overseas-made products.
3. Give a gift with every purchase
Adding a little surprise into an order, particularly if it’s been transacted online, can be a great and cost-effective way to remind customers of the value of shopping small and local.
You could include a:
- Product sample
- Blank gift card
- Handwritten thank you note
- Gift-wrapping materials
Perhaps you could partner with a fellow small business and exchange discount codes for your customers to add a little something extra while helping each other out.
For more ideas on how to encourage customers to shop local, see our top tips here.
4. Create unique offers for your existing customers
Creating special offers for your customer database is another proven customer retention strategy. It’s a way to show you’re trying to help their money go further, providing additional value during tricky trading times.
Not all specials need to be discount codes or free shipping, it could be simply giving your customers:
- A first look at new stock
- An advance opportunity to buy new products or sales items before the general public
Don’t forget to take the time to think about the subject line on your email and make sure it sounds enticing without being a false promise. Read more about writing subject lines and other tips on crafting engaging emails here.
Having unique offers in your email marketing materials may increase the odds your customers will see the value in remaining a subscriber and go on to make a purchase.
5. Build a personal connection
One of the advantages of running a small business is the ability to connect directly with your customers and create an opportunity to emphasise your business values.
Customers can often appreciate the ability to interact with a business owner over an automated bot or customer call centre. You can work to leverage this connection to build loyalty.
6 in 10 consumers say they are loyal to a company because they feel a personal connection with the business.
Responding directly and promptly to contact from customers, showcasing some behind-the-scenes content on social media or including a personal message with a purchase are just some tactics that can help you introduce the person behind the brand and build a connection with your customers.
6. Keep your website up to date
A GoDaddy survey of small business owners in January 2022 found an online presence was now responsible for half of their annual revenue, with 23% saying 100% of their revenue comes from online sales.
This makes your website one of your most important sales and marketing assets.
Keeping your website up to date and relevant is important to help retain and attract new customers.
It’s important to ensure the basics are correct like:
- Contact information
- Social channel links
- Services or product offerings
You can also consider a more thorough review to see if the style and substance of your website is still relevant to your audience and mission.
For more information on how to conduct an annual website review, read our comprehensive guide here.
Editor’s note: If you have a small business but no business website, now is definitely the time to get one. Build it yourself — truly no tech skills needed! — or let the pros at GoDaddy build one for you.
7. Showcase customer testimonials
One part of building a great customer service offering can be seeking, acknowledging and responding to feedback.
Building in an automated feedback request form or link is one way to prompt customers to share their experience with you and other potential customers.
Once customers have left a review or feedback, reply to the comment or thank them to reinforce you value their opinion and appreciate the time they’ve taken to leave a response.
Collecting and curating the best of your feedback can also produce great potential content for your email marketing materials or social channels as you can share great responses with your customers.
If you happen to receive negative feedback, take a beat to consider how best to respond and offer to take the discussion offline to see if it can be successfully resolved.
Read our top tips on how to get and handle feedback from your customers here.
8. Create useful content for your customers
Our final customer retention tip helps build value for your customers by offering them useful content that helps them to better use their purchase after they’ve left the checkout.
Creating dedicated content to share with your customers after-purchase shows you care about their product or service experience and want it to remain positive.
Examples of creative content include:
- The best tips for styling, installing or maintaining a product or service
- Expert tips related to your business or expertise
- Holiday gift guides for various people (mom, dad, boyfriend, etc.)
Picture framers could share how best to style a picture wall, gardeners how to cultivate an herb garden and boutique owners how to build a capsule wardrobe on a budget.
Read this post for more inventive ideas for content your customers will want to share.
Make them like you too much to leave
We all return again and again to those businesses where we have a personal connection.
Whether you tuck a freebie into every food order that goes out the door or make a point of greeting regulars by name, customer retention comes down to the little things.
Pay attention, answer their calls and comments promptly, remind them of the quality of your products whenever you can. Tactics like these will keep customers with you through the months and years ahead.