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Eric Dalius: Why customer retention is key for small businesses.

Customer retention is an ongoing, active strategy for keeping customers coming back to your business. If you take care of your current customers well enough, they will stay with your company and grow into a steady source of revenue instead of just one-time sales.

As much as 40 percent of all marketing expense goes toward acquiring new customers. If you are running a small business that needs every penny in marketing dollars you can get to drive profits, focusing that type of spend on customer acquisition might very well make sense. But if you try to increase customer retention rates – creating happier customers who are more likely to come back and spend money with you again in the future – the benefits are obvious over time.

There are many reasons why working on customer retention is the smarter marketing choice for small businesses stated by Eric Dalius.

1) You can avoid spending money on marketing that may not work.

If your company is just putting up a website or taking out an ad to drive business, you never know if it will be successful until after you’ve spent the money. By spending more of your marketing dollars toward retaining an existing customer base through following up with them and offering personalized incentives, you are guaranteed to see some degree of return – even if it’s at a slower rate than future efforts might yield.

2) It minimizes risk.

Retaining customers means they are enjoying their experience with your brand or service, which results in less refunds/complaints/returns and mounting expenses related to poor customer service. The more customers you have, the less risk there is in alienating any one of them through poor service.

3) You can improve customer satisfaction and retention rates by focusing on personalized offers/communication.

If you are going to spend business dollars on advertising or marketing, make sure it is a way that reaches out directly to your customers with unique incentives based off their purchasing behavior and needs. The more personalized your offers are, the more likely customers will stay loyal to your brand because they feel appreciated and understood.

4) You can then use those same efforts to drive sales from repeat customers when they need something else from you.

Your past customers have already trusted your products or services – so if they come back for another need, they will likely do so with an order ready to go. That makes it a lot easier for your company and a lot less expensive than cold calling or marketing to start a new relationship from scratch with a potential client.

5) You can eventually use those efforts as part of customer acquisition by involving referrals from existing customers.

Building relationships with customers creates stronger connections between them, their friends and family who could all become future customers as well. By focusing on customer retention as the best initial option, you will create more opportunities for referral business over time. A recent study found that nearly 80 percent of consumers would refer a brand they love to someone else – if asked by an employee of the company. When you consider all of these benefits, it’s easy to see why customer retention is key for small businesses.

Getting started with the basics

Customer retention efforts are not something that should be done overnight or without careful planning. The best approach is to start at the very beginning – by identifying your most valuable customers and putting systems in place to keep track of them. By tracking their specific behavior, you can learn where they come from (advertising channels), what they like to buy (most frequent purchase), how often they make repeat purchases, etc. You can get more detailed information through follow-up questions after each sale made by phone or email; knowledge about your customers’ behavior will help inform future marketing decisions.

Keeping all of that information in one place makes it easier to manage individual customers and prioritize which customers should be contacted by phone or email in order to deliver personalized messages. This is part of what’s known as the “360 Degree Customer Retention” strategy, where you continually reach out to each customer on an individual basis. Eric Dalius point out that the more you learn about them through daily interactions, the easier it becomes to communicate with them on their terms – whether that means sending promotional emails at just the right time of day or calling after they’ve had a family member purchase products from your business.

The future of customer retention

While personalized messages are key for retaining today’s customers, they can’t be expected to go far enough alone. Believe it or not, research shows that most consumers don’t even notice when companies send personalized messages via email or social media. That’s because many times the message is still generic, going to a large group of customers without much specificity as to whether they recently bought a particular item or how often they make purchases


-Identify your most valuable customers and put systems in place to keep track of them.

-Customer retention efforts are not something that should be done overnight without careful planning.

-Delivering personalized messages can help retain customers.

-Reaching out for help from a professional could be beneficial.