Customers are the lifeblood of your business. But sadly, unlike the lumber you sell, they don’t grow on trees. Which is why you’ve heard over and over again how important it is to retain your existing customers.

Studies show that it costs six to seven times more to acquire a new customer than to keep an old one. More importantly, boosting customer retention by as little as 5% through improved service and relationships can increase your profits by as much as 95%.

So let’s look at a few simple ways you can improve relationships with existing customers and make an impression on future customers without spending much, if anything, out of pocket.

1. Treat your employees the way you want them to treat your customers.

You expect employees to look up to you and follow your lead. But you’d be surprised how much they actually take their customer service cues from upper management.

Employers who enthusiastically greet their employees each day, treat them with respect and dignity, listen closely when they speak, and try to accommodate their special requests will notice the same care and respect given to their customers. Consistently rude customer service is more of a reflection on the management than it is on the employees.

2. Know who your customers are and help them know who you are.

Can you recognize your regular customers when they come in? Do they know who you are as well? Introducing yourself to your customers and calling them by name when they visit is a simple way to make them feel important and let them know how much you value them.

It may be old-fashioned, but posting pictures of the manager and assistant manager near the entrance is a great way to break the ice and let everyone know who’s in charge. Keeping your office close to the cashiers and leaving the door open is another way to show you’re easily accessible.

3. Make sure every customer is greeted within 30 seconds.

It goes without saying that a customer should never come in, look around, and go out without ever having their presence acknowledged. Retail businesses that conspicuously require their employees to parrot, “Hello,” whenever someone opens the door aren’t much better. You want every customer to be not just greeted, but actively engaged within moments of entering.

Nordstrom’s and Starbucks have followed that principle for years and followed it up with impeccable service all the way through checkout. Now their customers will happily pay a little more for their products.

4. Give customers the benefit of the doubt.

Whoever said, “The customer is always right,” probably wasn’t a store owner. But if you aren’t gracious and tactful about proving a customer wrong, chances are he won’t be your customer much longer. So if you don’t have enough evidence to easily convince a customer that you’re the one who’s right this time, take a step back and start looking for ways to make him feel like he’s won the battle. Don’t risk losing a good customer over a matter of a few pennies or some other minor discrepancy.

On the other hand, if it’s a more serious matter, consider the quality of your relationship and how much you want to do business with the person in the future. Someone with a history of complaining and taking advantage of you might not be worth keeping as a customer, unless, of course, you’re dealing with an influential person who might try to damage your reputation.

5. Instead of saying, “as much as I’d like to help…” make a habit of saying, “I’m happy to help…”

When an enthusiastic customer has a question or a request, it’s never good to tell them you’re too busy to help or make an excuse that essentially means you can’t be bothered. Wanting to get questions answered and have a conversation with an expert is probably why they came to your store in the first place – rather than purchase online.

So if you take the time to listen to your customers and go out of your way to help, it will leave a favorable impression that could greatly enhance their loyalty to you. Maybe they’ll choose your store over the Internet for even simple purchases.

To take it a step further, consider ending every encounter with, “Let me know if there’s anything else I can do to help. I’m happy to be of service” It’s a great way of saying that you’re always there for them, no matter what problem or question crops up.

6. Don’t be afraid to say, “I understand how___________ that must be.”

Frustrating.” “Annoying.” “Confusing.” There are many ways to fill in the blank and immediately empathize with a disgruntled customer. Once you’ve done that, it’s much easier to choose the appropriate course of action and diffuse the situation.

While fair prices are important, customers are driven more by emotion than logic. So being able to read their mood and relate with how they actually feel can be critical to your ongoing relationship. Offer a sincere apology at the appropriate time. Then, of course, take steps to fix whatever was frustrating, annoying, confusing in the first place, so it doesn’t happen again.

7. Do whatever you can to say, “yes” to special requests or say “no” as nicely as possible.

It’s always good to have standard operating procedures. However, if a customer cares enough to ask a favor or make a special request, it could be worth the effort to allow an exception from your customer service policy and be accommodating (as long as it’s legal). You don’t have to rewrite all of your well-thought-out company manuals just because of one customer. But by giving them what they request, you could be creating a loyal customer for life.

8. Never say, “I don’t know” and apologize for your ignorance; better to say, “Great question. I’ll find out for you.”

You want customers to come to your store for knowledge and expert advice. Yet when you – or more likely your new employee – don’t have the answer, it can be awkward to say the least. So instead of creating a negative situation by making an excuse, like:  “Sorry, no one’s ever asked me that before,” or “I’m new here,” turn it into a positive by focusing on what will be done to get the answer:  “Great question, let me find that out for you.”

Most customers won’t mind waiting a moment if it means getting the correct answer. But the pressure is still on you to follow through within a reasonable time frame. And obviously, you want to be clear and up front if you can’t make it happen almost immediately. If it will take several minutes, ask the customer if they have any more shopping to do, so they can make the best use of their time. Or better yet, ask for a phone number and call them back — but not after you take your lunch break and call a few friends about your Friday night poker game. A quick response is always appreciated.

Basically, the principle of refocusing the conversation on the solution can be applied to other situations as well. Whenever you can put the emphasis on what will be done rather than what went wrong, you’ve made a good move.

9. Make sure you and your employees are prepared to handle an irate customer.

No matter how good your customer service is, your store is bound to have an upset customer every now and then. If a shopper is having a bad day, it could be something beyond your control or not even your fault that sets them off. And the last thing you need is to have an ugly scene in your store that influences other shoppers to look elsewhere.

The best thing to do is be prepared with guidelines that will help make sure every employee knows what to do and say when a customer starts to make a scene. Unless you trust every employee to remain calm and be able to soothe a tense situation, the first guideline might be to turn everything over to you. But if you can’t always be the one in charge – or want to empower others – make sure you have guidelines for what to say and do in every conceivable case. A good way to start is with these four important tips:

  • Remain calm and don’t take it personally – If you start dishing it right back, you’ll end up looking like the bad guy. When you maintain your composure, the customer is much more likely to do the same.
  • Assume they have a right to be angry and listen closely – It may be the customer who made a mistake or had unrealistic expectations. But if you give them the benefit of the doubt and hear them out, you’ll seem like an ally instead of an enemy.
  • Actively sympathize and apologize gracefully – After a customer vents, it’s good to let her know you understand where she’s coming from and how she feels. Express sympathy for the unpleasant experience and offer a simple apology, such as “I’m sorry you’re not happy. Let’s see what we can do to make things right.”
  • Own the problem and find a solution – No matter who created all the drama, tell the customer that it is now your problem and you will take responsibility for making things right. Ask him what he feels should be done or suggest your own fair answer to the problem. Chances are, you’ll end up with a satisfied customer.

10. Get feedback. Ask customers how your company is doing and what you could do better.

Not every customer will speak up about a lackluster shopping experience. In fact, the average business will hear from only 4% of its unsatisfied customers and even fewer will comment on a positive experience unless prompted. So why not leave a brief “How Are We Doing?” card at the checkout stand, include it in their statement, or better yet, email it to your customer list so they can respond at their convenience. Ask them what they like and don’t like; what you should change or do better. To ensure the customer sends it in, have it pre-stamped or offer an incentive. And if they give their name and address, be sure to thank them.

Keep your customers close!

These are just a few ideas that will help you improve your customer service. Remember, the better you are at keeping existing customers happy, the less you have to work at attracting new ones. Happy customers will do that for you.