If customers are a small business’ most important asset, then establishing a loyal, returning customer base is the ultimate goal.
While many businesses face the dilemma of deciding whether to focus on growth or retention, a balance of both is ideal, especially if you’re in the early stages. If you have an established customer base, focus first on retention, then aim for growth.
Retention has benefits beyond the fact that customers return. A kept customer requires far less resources than finding and marketing to a new one, and they’re more likely to try new products, services, or upgrades your small business offers. A loyal customer base also lets you take more risks and try to ways to attract new customers without jeopardizing cash flow.
If you’re looking to set up your small business for consistent growth, or operating on a tight marketing budget, focus on customer retention. Here are five tips with help from Kabbage, who NFIB has teamed up with to offer members a simple, modern way to access small business funding with the flexibility they need.
1. Educate Customers with a Blog
You know your business, staff, products, and services better than anybody, so why not share your knowledge with customers? If you have a website, consider adding a blog with regular tips, guides, suggestions, and anything related to your business and industry that helps your customers or adds value.
The beauty of blogging lies in its low effort and expense—short, simple updates and articles can live on your site and help drive visitors deeper into your page (which is especially helpful if you sell online). Blogging can also improve your website’s search engine rankings, generate more web traffic, nurture relationships with current and potential customers, and build more trust in your brand.
Key points to remember with blogs are regularity and value. If you commit to a weekly or monthly piece, stick to it, and ensure whatever you’re posting offers value to readers. Plan content well ahead, and while it’s fine to include some sales-focused or promotional content, try to keep the blog focused on being helpful instead of selling or advertising. Remember, if someone’s reading, they’re already interested in your brand, products, or services. Find more small business blogging tips here.
Related: How to Start a Small Business Blog
2. Offer a Loyalty Program
Rewarding clients for loyalty is one of the best ways to boost customer retention. Especially if your business has a lot of competition, a loyalty program can help differentiate your products or services and encourage customers to return.
Offering rewards (like discounts, free products, or entrance in a contest) for frequent purchases can be an engaging way to encourage customers to return. Think of it as bulk pricing—customers get a lower price, or a free item, once they accumulate enough points from purchasing enough for you to cover most or all of the cost.
Adding an element of gamification to the loyalty program is a great way to make it fun for customers, too. Whether it’s building up points to reach new tiers (and greater benefits), or adding an element of luck with a chance to draw a better benefit at random, the more fun it is, the better. Just make sure you build your program in a way that will never cost you more than it brings in.
3. Create a Referral Program
Like a loyalty program (but focused on both growth and retention), a referral program is another great way to incentivize new customers to return and share your business’ products and services with their friends and networks.
By rewarding current customers for referring others, you can focus your marketing budget and get a far better return on your investment. Offer satisfied customers benefits in the form of discounts or free products in return for being ambassadors for your brand. Leads from happy customers are probably going to be more successful than those you’d get from cold calling or broad marketing campaigns.
Planning and proper timing are key. Make sure you’ve mapped out a proper budget that will yield good return on investment, and base benefits on completed sales, not just referrals. Instead of asking for referrals immediately following a sale, allow customers time to test and evaluate your product or service. You can also up the ante by offering greater benefits for more referrals.
4. Personalize Whenever Possible
Retaining customers and keeping them loyal requires earning their trust, which is built through a relationship over time. While it’s not always possible, there might be opportunities for your small business to make your product or service—or even how you deliver it—a bit more personal.
Personalization is a great way to keep a customer’s attention both online and off. Starting with your website, ensure products or services that are relevant to a customer are the ones they see when visiting or logging in. Offline, something as simple as including a short personal note with orders can let customers know you appreciate their business while also reminding them of your brand.
Another way to build trust and offer personalized service is to actively seek feedback—even the most negative—and let customers communicate any unhappiness as quickly and easily as possible. While it can be tough to hear criticism, customer complaints are invaluable information that can let you correct any problems before customers are lost.
Ensure your contact information is up to date online and include an active email address (ideally one for the owner or manager, not a generic address). The more criticism you can receive directly and privately, the less will be posted in public forums online.
5. Connect on Social Media
A strong social media presence makes it easy for customers to engage with your brand, and makes it just as easy for you to engage with them. The easier it is for you to communicate with customers, the easier it is to get feedback, answer customer questions, keep them up to date on events, promotions, or new products and services, and share content from your blog.
There’s no need to be on every channel, but make sure you’re front and center wherever most of your current customers are. You can bet your competitors are probably using digital marketing and advertising to attract and lure your customers, so if you can make your customers an audience on social media, you can reach them for free.
Offering incentives for social follows (like a referral or loyalty program) can also be effective, but so can simply including your social contact information on your website, in emails, and even on any print materials or packaging you send to customers. Be sure to actively monitor and listen to customers, make it a conversation, and be accessible.
Requesting online reviews from satisfied customers and responding to negative reviews is another great way to engage. Businesses thrive on social media when the process is treated as a conversation, so be concise and keep it two-way.