I bought a product at a store that I visit about once a year. The store is pricey, but has unique products that I can’t find anywhere else. It’s not far, but it’s not as close as its competitors. While there, I always pick up pop snacks. They’re tasty and you get a big bang for the munch in a single pop.

On this visit, I brought home a few flavors. All of them were their tasty, crunchy selves except one. Every bite lacked crunch as if it was past its sell-by date. (It wasn’t.) And both bags of the same flavor had the problem. Considering all the other flavors were good and it was the first time I had experienced this, I emailed the store.

A customer service rep responded within a reasonable time. He apologized, asked for details and promised to ship a replacement. Time passed. Nothing showed up on my doorstep.

Bungling customer service

After about two months, maybe more. I replied to the original email asking about the status. The rep apologized and said he would get right on it.

The package came within a couple of weeks.

And he surprised me by sending not two, but four bags of pops. In addition to the stale flavor, they sent one other flavor I had never seen in the store. All four bags tasted fresh and flavorful as I’ve come to expect from the product.

Not only did he make up for their misstep by sending me extras, but also they turned me into a fan of the new flavor. It could’ve been easier and cheaper to send the replacements. The store didn’t owe me any more than that. Because he worked to make me happy, I ordered more and sooner. With more choices in the online store, I shopped there and bought more than I did in the store.

So what did this store do right?

It made me happy.

Sure, it cost money to ship extra bags of the product. But they already had a customer in me. They didn’t have to work to convince me to try their product. They wanted to replace an inferior batch of their product and keep me as a customer with the lagniappe, or little something extra.

In the end, it paid off. Like I said, I bought more and sooner. The profit from the next order most likely made up the difference.

What’s the secret to keeping customers?

Four words: make your clients happy. That’s it. No, not keep your clients. A client can continue buying from a company without being happy. If the company wants to hold onto the customer, then it needs to turn it around before customer service suffers, prices fall out of line with the industry or the product fails to live up to expectations forcing customers to look elsewhere. Or perhaps, before a cheaper or better product comes along and snaps ‘em up.

Your clients already know you, which puts you ahead of everyone. You maximize the acquisition cost for your current customers by keeping clients for another month. The longer you keep customers past the break-even point of acquisition, the greater the profit.

Spending resources on acquiring new clients dilutes your customer service to current clients. Customer service means doing more than being there for them when they need something or have problems. Make time to talk and listen to them, find out what they want and what annoys them about doing business with you.

Customer burden of proof

It’s a fact that working to hold on to current clients is cheaper than hunting new ones. The proof is in the math. Let’s say you do oil and gas equipment repair. You make a deal with customers to support them for one year for $5,000.

How much does it cost to land a new customer? Let’s throw out $1,200. The break-even point is about three months into the contract. You make a profit of $2,800 for a one-year contract. What if your employees make the customer happy that the customer extends the contract for another year? This time, the $5,000 is pure profit. Since you already have the customer, there is no acquisition cost.

You might be thinking: Hey, the cost of acquiring clients isn’t that high especially with all the low-priced resources available on the Internet.

Good point. In fact, marketing guru Seth Godin says the Internet has drastically lowered the cost of a customer. This is true except the cost isn’t $0.

What’s the price of client acquisition on the Internet and social media?

Your company can’t show up on the Internet without help. A miracle happens. The press loves your company and writes about it often. The reality is that it isn’t true for most businesses. A good website costs money. If you build it, they won’t come. You need to create content that you can spread around the web and on your website because search engines love fresh content.

Social media gives companies a way to connect with customers. Most businesses have customers using Twitter, Facebook, LinkedIn and other networks. Businesses show up in these networks with their eyes and ears open. At the very least, employees from your company need to monitor social media and respond when the company is mentioned — whether it’s good or bad.

Companies that do more than monitor by engaging in conversation will be remembered. A consistent appearance in social media and responding to help with no expectation of anything in return puts a company top of mind.

It may not cost anything to use Twitter. You still have the investment of your employees’ time, however. Who’s going to create the content that gets your company’s name out there and noticed? That won’t be free either.

So, yes, the Internet has affected the cost of acquiring customers. In the end, it’s still cheapest and easiest to sustain the ones you have.

And I submitted a big order of pop snacks and other products from the company to try. It would’ve never happened had customer service not done that little extra to win me over.

How do you find most of your clients? How much effort should companies put into customer retention?

Image credit: Frank Douwes