4 Ways to Improve Customer Retention

customer retention tactics for small business

POSTED ON: Friday, August 28th, 2015


The Case for Customer Retention

Before we get into how to improve customer retention. We should ask why give it focus alongside acquiring new clients? The answer it turns out is very simple and backed up by compelling evidence:

  • It’s far Easier: 50% easier (Marketing Metrics)
  • It’s much more Cost Effective: according to 70% of companies ( eConsultancy)
  • It’s more Profitable: 5% increase in customer retention can increase profitability by 75% (Bain and Co.)
  • It’s your Future: 80% of your company’s future revenue will come from just 20% of your existing customers (Gartner Group)

I am not saying don’t recruit new clients. What I am saying is, that it is time to redress the balance and give focus to customer retention.

4 Ways to Improve Customer Retention

Customers don’t owe you their loyalty. You have to earn it — every day. So don’t let your competition tempt your best customers away because you were complacent

1 -Red Velvet Rope Policy

You have been invited by a friend to an invitation only event. You walk up that red carpet and you are met by the commissionaire. He checks you out, lifts the red velvet rope and you are in!

red carpet

Michael Port describes a method of selecting clients that bring out the best in you and your organisation. They challenge, motivate and inspire you to perform at your best. But reverse the logic; suppose your customers feel that way about you? I have a client in commercial drainage with a customer that believes that about the team that serve him. What would that look like in your business?

2 – Build Relationship

People buy from people. Sure, you have to have the right product or service but when it comes to choosing, relationship is a very powerful delineator. How many times are you faced with an incumbent with a strong relationship with the would be client; despite considerable advantages you lose out to that emotional commitment built up over years

3 – Constant Contact

Socialising with your customers builds retention. Give your customers a voice and a forum to connect with you and other customers. Relevant newsletters, thank you emails and other social media interactions all count.  To quote Lovemarks, “inspire loyalty beyond reason”.

4 – Deliver Value

I have left the obvious until last … or is it? Many of us shy away from specifically asking what the benefit of our interaction with another company has been; e.g. how much more profitable are you as a result of …? If the bottom line advantage is greater than the cost then you have every chance of developing the relationship.


Simon Tempest is a director of the Pro-actions group of companies. For more thoughts from the Pro-actions team go to /blog/

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