The Definition of Customer Retention for Coffee Shops
Customer retention refers to how many customers return time and time again to your coffee shop.
A lot of business owners find themselves making mistakes in the early stages of operating their first company. When asked about the importance of gaining new customers, many people are quick to say that it is far more profitable to gain multiple customers per day, rather than acquire the loyalty of a few customers daily.
While it can feel very exciting to welcome more and more people into your coffee shop, the focus should actually be on learning how to retain the customers you already serve.
The Importance of Customer Retention and How to Increase Yours
Without customers, you have no business. Well, technically, you have a company, but you do not have anyone purchasing your products, and therefore, you are not profiting like a business needs to in order to stay open.
Believe it or not, the process of customer retention doesn’t start once a customer comes back to your coffee shop a second time; it actually begins with the very first interaction you have with each customer. From the moment you welcome them into your shop and ask them what they would like to drink, you are making an impression on your customers.
Focusing on bringing more people into your coffee shop is known as customer acquisition, and unlike customer retention, the acquisition process is considered short term. Customer retention is a process that looks more towards the long term benefits of holding onto the customers that you already have.
Yes, it is an absolute must that your business accrues more and more customers over time. However, if you are only worried about bringing in fresh foot traffic, you will inadvertently toss your regular customers to the wayside, at which point they will likely stop coming into your coffee shop altogether.
Nobody wants to feel like they are nothing more than a transaction waiting to happen, but when you do not take the time out of your day to show your current customers that they are appreciated, your regulars will take it as a sign that they deserve better. Do not miss out on securing customers for life all because you are so focused on increasing your individual daily sales.
There are so many ways by which you can increase the customer retention rate of your coffee shop. The first step is to acknowledge that customer retention is a significant part of a successful business plan.
From there, follow our advice on how to increase coffee shop customer retention rates. You will not believe the positive impact that an increase in customer retention will have on your business!
Five Ideas for Increasing Coffee Shop Customer Retention
Our five most important tips for increasing customer retention rates for your business are…
- Above everything else, prevent potential problems
- Invite customers to provide you with feedback
- Honor your customers with a rewards program
- Figure out how to communicate with distant customers
- Start sending out monthly newsletters and weekly emails
Above Everything Else, Prevent Potential Problems
A lot of companies focus on something known as anticipatory service. This is a business tactic by which you anticipate issues that may arise as part of your industry, but you resolve the source of the issue and completely prevent the problem from happening at all.
This is such a vital part of increasing customer retention because it’s a positive way of bettering your customer service techniques. The more proactive you are, the more impressed your customers will be, and that keeps people coming back for more.
Invite Customers to Provide You With Feedback
Have you thought of giving your customers the option to help you make decisions within your coffee shop? If this was not an idea you had previously considered, write it down as a note in your business and marketing plans.
When you are able to retain your current customers, your business will have to spend less on marketing, which will reduce the percentage of your budget that you put towards attracting more customers. Inviting your customers to engage in the decision-making process will help you in this regard.
It costs quite a lot of money to try to find more customers who might be interested than it does to secure the people who already believe in you, not to mention frequently purchase from your coffee shop.
Focus on building long-term relationships and watch as the benefits reap themselves. Asking for input from your customers is an excellent way of ensuring they they feel listened to and respected by the companies they support most.
Honor Your Customers With a Loyalty Rewards Program for Regulars
Outside of providing amazing service, one of the most influential steps you can take when trying to increase your customer retention rates is to implement a loyalty program for people who frequent your coffee shop. After all, who doesn't love sales?
A rewards program can take many forms, but for the sake of convenience, we will discuss some of the more common ones for customer loyalty programs.
If you use something known as Square, then you are likely familiar with app-based loyalty programs. For those of you who are not as knowledgeable in customer rewards programs, there are a couple of different ways that you can institute a program intended to increase customer retention. Years back, many coffee shops would hand out physical punch cards.
Whenever customers would come into the store, they would present their cardboard card and receive a stamp with the purchase of each drink. Usually, the tenth drink would be free.
This is a way of incentivizing customers to continuously purchase more and more coffee-based beverages. Eventually, they would reach their free drink. The prospect of receiving your morning cup of joe for free is too enchanting to pass up.
Start Sending Out Monthly Newsletters and Weekly Emails
Email marketing is one of the few business marketing tactics that do not cause a huge dent in your financial budget. While crafting, drafting, editing, and sending emails takes a lot of time, it does not cost you anything to start on an email marketing campaign.
The only instance in which this digital marketing technique would become costly is if you hire someone else to take on the task of writing emails and newsletters. If you are a small business, consider taking on this duty by yourself, at least to start.
Later on down the road, you can certainly outsource this job to somebody else. But for the time being, save money and increase customer retention all at once by handling the email marketing yourself.
Figure Out How to Communicate with Distant Customers
Learn as much as you can about your customer base. If you are having difficulty reaching out and connecting to distant customers, brainstorm various ways to show that they are important.
At the end of the day, all your customers want to know if that you value them as people, not just as transactions. Get to know who your customers are, and start postulating all the different ways you can reach them on a level that they will appreciate.
Usually, the majority of coffee-drinking customers just want to know that you are willing to take your time with their coffee. Get to know who they are on a more personal level.
Sometimes, you can identify customers who are standoffish right from the first interaction. If a regular customer who is usually very reserved ends up having a noticeably bad day, consider giving them their drink for free.
Small gestures go an incredibly long way. Cherish your coffee customers, and they will appreciate you right back!
What to Expect from Higher Rates of Customer Retention
When your coffee business masters the art of customer retention, you will notice that the loyalty of your customers increases over time. Customer loyalty is such an important factor in the retention of your audience, so working towards implementing customer retention strategies will help your company more than you could imagine!
From anticipatory service methods and feedback options, to customer loyalty programs and email marketing campaigns, increasing customer retention is entirely possible. As long as you are consistent and genuine, you will see an increase in customer retention rates.