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7 Small-Business Strategies for Customer Retention

Customer retention is a crucial aspect of any successful business. It can lead to increased customer loyalty, repeat business and, ultimately, higher profits. Customer retention can also help build your brand and reputation. Loyal and satisfied customers are more likely to recommend you to others and leave positive online reviews.

Here are a few strategies small businesses can use to build customer loyalty and minimize churn.

1. Provide Exceptional Customer Service

A 2018 survey by Gladly found that 68 percent of customers say they're willing to pay more for products and services from brands known for providing good customer service. Providing outstanding customer service is at the core of customer retention. Train your staff to be attentive, empathetic and responsive to customer needs.

2. Employ Post-Purchase Follow-Ups

After purchase, send a follow-up email or message to express gratitude and check if the customer is satisfied. This shows you care about their experience and can help address any potential issues before they escalate.

Follow-up messages also provide you with the chance to upsell customers or tell them how to get more out of the product or service. For example, since my company offers business-to-business mobile marketing services, we make sure customers are aware of all the apps that could benefit them. These don't usually entail additional purchases, but they inform our customers about how to get the most out of our service.

3. Offer Personalization

Tailor your interactions and offerings to individual customers as much as possible. Use customer data to understand their preferences, purchase history and behavior. Then, send personalized recommendations, offers and communications.

With this step, ensure you do not overuse automation tools. For instance, a chatbot can be a convenient way to engage with website visitors and answer basic questions. However, customers and prospects should still have a way to reach you and get a personal response.

4. Create a Loyalty Program

Implement a well-designed loyalty program that rewards customers for repeat purchases. This can be in the form of points, discounts, exclusive offers or freebies. Make the rewards meaningful and attainable to encourage customers to stay engaged with your business.

For example, many of my customers use our SMS loyalty program. Customers join by texting a keyword and can claim rewards every time they patronize the business. This could be a cup of coffee, an oil change, a spa treatment or anything else.

5. Use Feedback and Surveys

Ask for customer feedback regularly, and use it to improve your products and services. Customer surveys can provide valuable insights into what you're doing well and what needs improvement. Show that you value their opinions, and take action based on their feedback.

While yes-or-no and scale questions are useful, don't overlook the value of open-ended questions where the respondent has to give a more complete answer. I've found it especially helpful to ask:

  • "What's one feature you'd like to see in our service that would make a big difference to you?"
  • "When you contacted customer support, were there any steps, terms or recommendations you didn't fully understand? If so, what were they?" This is especially relevant when you have a tech-related product.

6. Build Community

Create a sense of community around your brand. If your business has a physical location, hold events in or near where you're based. Depending on your niche, this might include entertainment, food tasting, holiday-themed parties or raising money for a worthy cause. You might even partner with other local businesses. Online, you can build community through social media groups, forums or events where customers interact with one another and share their experiences. In my experience, engaged customers are more likely to stay loyal.

7. Reach Out to Customers Who Have Left

For customers who have become inactive, consider targeted win-back campaigns that offer incentives to return. Offer a special discount or promo code to return, for example. Some people might not have abandoned you out of dissatisfaction; they might simply be distracted and busy. Sometimes, customers just need a little nudge to re-engage with your business.

All of these customer retention strategies have one thing in common: They are dedicated to building long-term relationships with customers. If you want to boost customer lifetime value, you need to focus on building trust and establishing value for your customers over time. Customer retention is an ongoing process, and it requires a genuine commitment to understanding and meeting your customers' needs.

Connect with an Old National Small Business Banker for more insights to help your business grow. 

This article was written by Young Entrepreneur Council from Inc. and was legally licensed through the DiveMarketplace by Industry Dive. Please direct all licensing questions to

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