Why Customer Retention Should be a Priority for Small Businesses
Acquiring new customers is always a good thing. After all, there’s no such thing as a “bad sale,” and every business wants to expand their reach and –– in the end –– make more money. However, it is possible for small businesses to focus too much on gaining new customers. Indeed, by trying to expand too quickly, small businesses may inadvertently alienate their most loyal customers. Here, we’ll explain why customer retention is so important, plus, share a few relevant tips to help you maintain good customer relations as well:
Benefits of Customer Retention
No two businesses are the same. Yet, regardless of size, industry, or product, getting a new customer is almost always more expensive than retaining a current one. In fact, it’s anywhere between 5 to 25 times more expensive to land a new client than it is to maintain a working relationship with someone already on your books. What’s more, it’s much easier to convert an existing customer than a relative stranger if you decide to roll out a new product. (This also presents the opportunity to upsell certain clients.) Lastly, customer retention is integral for branding purposes. Loyal, happy customers are invaluable to small businesses because of their ability to evangelize on a company’s behalf. A few positive reviews from satisfied customers early on in a business’s existence can give it the boost it needs to succeed.
Customer Retention Tips
Adopting a customer-first approach sounds great on paper, but it’s actually quite difficult to implement in real life. Thankfully, the following tips can help you hang on to your best customers on a consistent basis:
- Reward customers with loyalty bonuses. Special promotions, sales offers, or early access to product launches are all great ways to show how much you appreciate your most valued customers.
- Invest in new technologies to improve your service. This might mean purchasing a new POS by Retail Management Solutions for your pharmacy; or it could be a smart play to buy a new soda machine for your restaurant. Offering new-and-improved products and services will resonate with consumers (especially if your customers have requested them in the past!).
- Hire more customer-facing staff. People hate having to wait, and they equally dislike dealing with automated features (chatbots) when they have an urgent problem. By bringing on more customer service team members, you can increase your company’s ability to handle a large influx of customers.
Growing a business is a balancing act. Yes, it’s important to court new markets, but you shouldn’t lose touch with your most devoted customers doing so. Fortunately, the above tips will help you achieve your ambitions without forgetting your roots!