How Small Businesses Can Improve Customer Retention

Any business owner will tell you that customer loyalty is critical for success.  However, only the committed business owner will go the extra mile to achieve this prolonged loyalty.  According to a 2014 report from BIA/Kelsey, nearly 1000 members of Manta’s small business directory indicated a clear shift towards customer engagement and retention.  Furthermore, analysis from Jed Williams, Vice President of BIA/Kelsey, found that 61 percent of small businesses surveyed from Manta obtained more than half of their revenue from repeat customers rather than new business.  In addition, the data showed that repeat customers spend 67 percent more than new customers. Consequently, only 14 percent of the small business owners surveyed continued to spend the majority of their marketing budget on acquiring new consumers.

Marketing guru Theodore Levitt explained that customers want to be more than a faceless entity.  They want to feel that small business owners value them instead of just their money. Mr. Levitt explained how he witnessed many entrepreneurs work extremely hard to obtain customers, but did not maintain the effort necessary to retain these early acquisitions.  Without a consistent consumer base the businesses ultimately failed.  

There are four main strategies small business owners must adopt to achieve customer retention.  The first is to push a product or service that has a wide consumer appeal. The more interest the business generates, the more likely it is to retain customers.  The second step is to implement a consistent delivery system. It is important to ensure that current customers have easy access to the good or service provided. The better experience they have with the product of the business the more likely they are to return.  The third strategy is to maintain high quality production. If the business continuously provides a quality service for a manageable price customer retention will soar. The fourth method to increase consumer loyalty is to instill a passion for continuous improvement with all team members.  If all the employees of the company are enthusiastic about their product, customers will be as well.

Ultimately, continued profits simply comes down to customer retention.  However, consumer loyalty means consistently paying attention to the little details.  Once these details are identified, small business owners can develop a plan to ensure they are properly addressed.  The entrepreneurs who are the most successful are the best at instilling a sense of customer service in all team members.  Overall, as customer service improves, existing clients become more interested in the company and thus decide to continuously provide their business.  


Borg, T. (2015, April 29). Customer Retention Is No Accident — How Small Business Can Get It 

Right. Retrieved July 10, 2019, from https://www.entrepreneur.com/article/245312

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