Costs of acquiring new customers versus retaining current ones
A seasoned party rental expert will wisely tell you that keeping a new client is much more cost-effective than acquiring a new one. Yet, it is one of the most overlooked resources in our arsenals. Why is that? Many small businesses get caught up in new client acquisition frenzy thinking this is the answer to growth; however, this often only leads to short-term gains. Harvard Business Review stated astounding figures in terms of costs. For instance,
"Acquiring a new customer is anywhere from five to 25 times more expensive than retaining an existing one.”
Further, Forbes stated in a recent article that
repeat customers are more likely to "spend up to 67 percent more on average than new customers."
That loyalty and willingness to spend more on your product means your company will grow organically. Many event rental companies are errantly investing in a haphazard crazed marketing plan just to gain new customers and are mistakenly overlooking clients loyal to your brand. The customers that return--sing your praises from the rooftops (think reviews), invest in you, and sell your product through word-of-mouth--don't need that big marketing budget to retain.
Ways to Retain Loyal Customers
No matter what, you'll need to attract new customers in order to grow. But the trick is to turn each customer into a loyal, returning customer. To do that you should:
Keep a detailed, easily accessible history of your client's past orders and conversation history. CRM (Customer Relationship Management) tools, like those in Goodshuffle Pro, are essential for anyone who doesn't have a perfect memory. When a client calls, you need to remember who they are, how many times they booked with you, their preferences, etc. Who can remember all of that? By recording their project and conversation history, you're able to pick up right where you left off with a client and never forget important notes, such as a non-profit client being tax exempt or a client who always prefers a specific type of decór.
Stay connected, but not from a sales perspective says Forbes. Sure, all of us party rental businesses are looking to grow our direct sales lists, but actually staying connected with your existing client base from a non-salesy perspective will create a long-lasting relationship and strengthen brand loyalty. If they are connected "they will buy" without the hard sales approach according to Forbes. Further, the article recommends sending an email, text, or phone call just doing a check-in. Remember what is important to them such as milestone dates, wedding anniversaries, birthdays, or new promotions at their jobs.
Give them a reason to return. Incentivizing is never a bad thing, but strike a balance and do not undercut too much, diluting your brand. Reward because you value what the client does for your business; not out of desperation. Some event rental businesses encourage repeat clients with 10% off their rental order. Goodshuffle Pro can easily help your business by auto-populating a specific client's discount, or more client-friendly terms, into the client's online contract--special and unique to them.
The lost art of thank you cards. How frequently do you receive a handwritten note? Mostly likely, not often. Therefore, in modern times, it means so much more to actually write out a thank you note to a client than just a thank you email. Of course, this is time-consuming and may feel redundant. Keep it simple and get to the point. Invest in some quality stationery, and if possible, include your company logo on the return address. Thank your client for trusting you with their important event. It will cost less than a full-fledge marketing campaign, and it means something special to your client to receive that thoughtful note in the mail.
Invest in Loyal Customers and in Time Your Event Rental Business Will Grow
If your party rental business invests in long-term goals of customer retention, your company will see growth. Your business will be able to afford more inventory, quality staff, vehicles, see higher profits, and work more with your ideal client. Don't disregard your existing client base in the hopes of attracting a new, flashy client. They may not be as loyal as the ones you currently have.
Anna is a wife, momma of two, and the creator of Provenance Rentals, a boutique vintage rentals company inspiring Southern California and beyond. Provenance Rentals caters to those who seek romantic, unique, timeless, and high quality pieces to elevate their events.
Curious how Goodshuffle Pro can help you grow your event rental business?