Should your business brace itself for a summer customer exodus?
The new year sees a lot of people changing up their living situation. What does this mean for small businesses, particularly those entrenched and reliant on their local communities?
According to data from insurer Budget Direct, January is the most popular month of the year for Australians to move house – and that’s whether we’re talking homeowners or renters.
Whether it’s the longer break from work or school, the warmer weather, or the end of the calendar year mentally nudging us to make big life changes, post-Christmas sees a lot of people changing up their living situation.
The new year can also herald rent increases, as landlords take the opportunity to start the year with a fresh rental rate, forcing their tenants to move somewhere more economical.
What does this mean for small businesses, particularly those entrenched and reliant on their local communities?
One local hospitality business owner reported last January saw them lose a huge cohort of their regular customer base to the outer suburbs, making them feel like they were “starting from scratch all over again”.
As a small business owner myself, last December and January brought a multitude of farewells from some of our favourite regulars, who had to move due to being priced out of the neighbourhood or wanting to start new adventures.
For those customers who stay in the neighbourhood, the summer season can still make them scarce, as they escape from our suburban bounds and away for day trips and holidays.
So with so much movement from our customers, how can we mitigate these potential challenges to our businesses?
Lean on your loyalty system
Sometimes, they’re not moving that far. Your business may still be on their route to work, or they may detour slightly out of their way, just for you.
A regular at my cafe who moved two suburbs away was delighted to discover she could still stop past our shop on her way to work for her morning coffee, without adding too much time to the commute.
If you don’t have one already, and it suits your business model, make sure you implement a loyalty program to reward frequent customers. We recently moved from stamp cards to a digital loyalty system where customers earn points for every dollar spent, redeemable on their favourite barista drinks.
It’s been a huge success as the POS screen prompts customers on every visit to earn and redeem (much better than forgetting stamp cards every visit). When customers build up a bank of points, they’re more likely to return.
You won’t be able to keep every customer, but by keeping up customer relationships and offering great service (and a competitive loyalty program), you may make it harder for them to truly say goodbye.
Continue to attract new business
Even if you have a steady income and customer base, January is a great time of year to try and attract new business. This may be by getting some local media coverage, setting up stalls at local markets or festivals, or advertising – either online through promoted social media posts or even a good old-fashion letterbox drop.
Submitting yourself to online directories or exploring options that help your business reach further, like Uber Eats, can all help bring new customers to you.
Consider a smaller, but more considered, offering
If you’re a summer business by the sea, January will be a booming time of year for you. But for many suburban businesses, it’s a quiet start. You want to stay open and keep customers in their routine, but sometimes it’s hard to justify the cost if you’re not getting an ideal return.
Consider reduced summer hours or even a reduced offering during these holiday weeks – keep your quality high but minimise your offering to your best sellers to help with turnover and maximise income.
Connect with real estate agents
Local real estate agents in your area have their finger on the pulse when it comes to who’s moving in and out of the neighbourhood. Engage with them where you can and make sure they’re letting new homeowners and tenants know where to find you.
Build relationships where you get added to property descriptions as a local amenity or included in neighbourhood guides. Most real estate agents love to showcase key businesses in their area so by working closely with them you are gaining exposure to your local customer catchment.
Dealing with a changing local market can be a challenging way to start the new year, but with a little bit of forward planning, you can weather the (sunny) storm and set yourself up for a more successful year ahead.
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