By Barry Davis
It has become common knowledge in the payments industry that the role of the merchant level salesperson (MLS) has shifted to a consultative one. As technology has changed the frontlines of small business, merchants are increasingly looking for advice on how to adapt to these changes. MLSs are ideally positioned to become trusted advisers and add more value to merchant relationships as a result.
One of the most important things agents can do to add value to merchant relationships is to help their merchant clients turn one-time customers into loyal regulars. According to recent research we've done at Womply, "attracting customers" is the top worry for merchants, with "retaining customers" coming in at No. 8 on the list. That's a big disconnect, given how much more valuable repeat visitors are.
To be clear, attracting customers is a huge problem for merchants and shouldn't be understated. That said, it's obvious that merchants don't understand the value of getting their existing customers to come back, or they may assume that they already have a solid stable of loyal regulars. Either way, merchants need to recognize the value of repeat business and have a plan for getting their consumers back in the door.
Ironically, the mobile Internet has made small, brick-and-mortar businesses more relevant than ever. These businesses are now easier for consumers to find via local search apps and websites, and digital engagement with customers is easier for small merchants to achieve than trying to outspend competitors in traditional big-budget advertising.
According to Google research on the consumer decision journey, foot traffic to local retailers is down 57 percent, but the value of every customer who enters a store has tripled. In other words, it's harder to attract casual window shoppers, but the value of each person who walks through the door has never been higher. That's a huge opportunity for local merchants.
At Womply, we often hear merchants say that their businesses run on repeat visitors. Take Barbara Criswell, for example. She owns and operates a new-age bookstore and gift shop in St. Louis. Due to the nature of the business, you would assume Aquarius Books attracts a small but loyal niche audience. When Barbara found out that most of her patrons were first-time visitors, she told us, "It totally changed how I viewed people coming into the store."
Barbara's story underscores an unfortunate truth about running a small business: up to 80 percent of satisfied customers never come back, Forbes reported in 2016. It's not that they don't want to, but we live in an age of unlimited options and information overload. Every day, there's a new deal pinging your inbox, and large companies have figured out how to use advanced digital marketing and retargeting tactics to drive increased loyalty. Meanwhile, most small businesses just assume happy customers will return. Even a modicum of effort to increase customer retention can reap major rewards for merchants and increase transaction volume. According to Harvard Business Review, a 5 percent increase in retention can increase profits by up to 95 percent. Repeat customers spend 67 percent more, are 5 to 10 times less expensive to market to, and tend to promote the business to their friends and family.
For small merchants, the missing link in customer retention is digital. Every customer-facing business can and should create loyalty programs where possible, but in every case they also need to keep track of everyone who patronizes their shop and stay in touch digitally after they leave.
That can be as simple as creating a basic customer list and sending relevant email messages to stay top of mind. According to research from MarketingSherpa, 86 percent of consumers want to receive promotional emails from businesses they patronize every month. If your merchants aren't doing at least basic email marketing, they're missing out on a huge opportunity to stay top of mind and turn one-time customers into repeat visitors.
In addition to delivering deals, promotions, and happy birthday well-wishes to customers' inboxes, merchants can also build an organic following by setting up a page on Facebook or Instagram and staying active on review forums. Many of the most successful businesses have active profiles on social media/review sites like Yelp, Google My Business, and TripAdvisor. Customers and prospects are already on these sites, so it's important to meet them there.
Digital tactics like automated email marketing might seem intimidating or superfluous to merchants who are stuck in an analog mindset, but when their eyes are opened, they are like kids on Christmas morning. If you want to add more value to your merchant relationships, educate them on the power of repeat business and give them the tools to get more customers back.
Barry Davis is Vice President of Business Development at Womply, the top software partner to the payments industry and the top provider of front-office software to small businesses. For more tips or resources, reach out to the Womply team at firstname.lastname@example.org.
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