Tapping into the Potential 25% Profit Increase of Retaining Customers for Small Businesses

Whether you’re a small business, a micro business, or a new startup, customer retention should be atop your agenda. It’s difficult enough to stand out in the increasingly competitive world of business as it is, what with the biggest players only getting bigger and more competitive, let alone if you can’t keep those you’ve already convinced to become paying customers.

Of course, there are a great many considerations for your budget, including achieving employee retention, finding talent, setting up social media channels, getting the right financial software, investing in marketing, and more. Even so, to increase profits, all forms of small business should be aiming to retain – even above finding new customers. So, why is this the case, and how do other businesses go about achieving this?

Understanding Customer Retention and its Benefits

Competition in a whole host of different areas makes customer retention particularly tough and difficult to pursue. On the one hand, a sudden promotion or even a slight price move could have customers wanting to go elsewhere next time they need a repeat purchase. On the other, something as relatively minor as having the website act slowly when a customer visits can drive them away.

It all adds up to an average business seeing an annual loss of at least 15 percent of its customers. Behavior changes among customers, a poor customer service experience, or better competition can all cause this to occur. Partly because of this, being able to retain customers is an incredibly valuable pursuit. Some figures put trying to find new customers as costing as much as seven times that of retaining one.

Furthermore, in terms of profit, increasing customer retention rates within your business can flip into an increase in profit of somewhere between 25 percent to over 90 percent. In terms of return on investment, especially when compared to the cost of investing to find new customers, these are huge figures. Add in that revenue becomes more predictable and that you can unify the customer experience, and retention becomes all the more appealing.

Methods Deployed to Retain Customers

A lot of small businesses have noticed that, to help compete online, they should offer some kind of new customer perk, be it a one-time discount or a freebie of some kind. The key to customer retention once they’ve enjoyed that offer, however, is to keep some kind of rewards system flowing.

In the incredibly competitive space of online gaming, for instance, casino online bonus offers span deposit bonuses, daily offers, free spins, free plays, and more. While all different kinds of offers, each features as a promotion that all existing users can claim, and most are regularly posted or are offered every day. While less formalized, this is a spin on the tried-and-trusted loyalty program. Sports brands, coffee shops, and especially credit card brands all offer ways for users to acquire points and transform those points into tangible rewards. The key is to make those rewards consistently desirable and attainable.

Promotions can be particularly potent in the fight for customer retention. However, as a small business, one of the best things that you can do to home in on the right approach is to frequently ask for feedback. Through this crucial data, you can work out where your business can improve, how it can better serve customers, and make your customers feel more involved and engaged – especially if you act on their feedback.

Customer retention is a tremendous challenge, but it’s certainly worthwhile to try to keep your paying customers on tap.

Author Profile

Adam Regan: Deputy Editor

Features and account management. 7 years media experience. Previously covered features for online and print editions.

Email Adam@MarkMeets.com