Customer retention for Small Business.

How to keep your customers coming back.

Customer retention for Small Business is a relevant topic for many small business owners.  We all understand how important it is to attract new customers and keep sales flowing, but just as important is keeping existing customers, as they are a gold mine for most businesses.  Customer retention for Small Business is always on the minds of business owners. Identifying why customers may decide to leave in the first place and determining how to retain them is fundamental to running a successful business.

If you want to keep your customers coming back, first you need to understand the most common reasons for them leaving.  This allows you to develop some preventative strategies.

Reasons for leaving.

Some of the most common reasons for clients leaving include:

  • Dissatisfied with how they have been treated.
  • Dissatisfied with the product or service offering. E.g. They believe they are no longer getting value or return on their investment.
  • Feeling neglected.  Your customer needs have changed, however your business is not across their changing requirements.
  • Lack of trust. Not delivering what was promised.
  • Lured away by a competitor.

If they are lured away by a competitor, take a moment to dig deeper, determine what the root cause was, perhaps it was based on price, accessibility, levels of service, or another factor.

Being aware of the warning signs and knowing what sorts of strategies you can you put in place to help you retain customers will put you in good stead to keep your customers happy and keep them coming back.

Strategies to consider.

Managing customer retention for small business.

Handling customer complaints consistently. 

Change your attitude towards complaints.  They can be a blessing in disguise.  Complaints help you identify areas for improvement.  Proactively implement a complaints handling process. Train your employees so that complaints are handled consistently.

Actively seek feedback.

Empower you customers so that they know that feedback is welcomed and do your best to follow through and make changes when feedback is reasonable, relevant and warranted.

Do you actively seek feedback?  If not, consider running an annual survey or after sales survey to ask customers about their experience.  Perhaps your Facebook page provides a forum for customer feedback or you regularly respond to Google reviews about your business. Both are good ways to keep the dialogue flowing.

Consider an exit survey, or if you want to gather more candid feedback simply email them.  Ask them what part of the customer experience they would like to improve? Make a point of identifying what they think of your business, especially if your customer attrition rates are rising.

Be honest and direct in your communication.

Broken promises will lead to serious discontent and dissatisfied customers. Do your best to deliver on what you have agreed to and if at any point things happen that are out of your control that may jeopardise a deadline, a meeting or an obligation, be honest and direct.  Communicate the information to your customer quickly.  Keep them in the loop about any changes.  Customers that are informed will be less likely to be disappointed as their expectations have been managed more effectively.

Create a customer (buyer) persona.  

Spend time up front creating a customer (buyer) persona for your business.  For my business I have created a buyer persona. I know my buyers name, age, occupation, pain points, goals and motivations, this allows me to better understand their behaviour and offer advice, content and services that are valuable and/or appeal to my customers.

The better you understand your customer the better you can craft a sales message that perfectly matches their pains, goals and aspirations.  When you know what motivates them to buy you can tailor your messages to meet their needs.

Let’s use a general example that you might easily understand.

Think about a young couple who are looking to buy their first home.


Name: Jane and Mark
Age: 30 and 31
Marital Status: Married with 1 child
Income: Combined $150,000
Needs and motivation: Wanting to buy a home for more security and to accommodate their growing family.
Want to find an agent they can trust.
Want to take their time to find the perfect home.
Behaviour: Tech savvy, most of the house hunting is done online. Anxious about the process. Want to be guided through the buying process. Tend to ask friends and family for Agent referrals and advice.

This gives us an insight into what motivates the couple to buy and also provides evidence of how they might search for properties and where they may go for information.

Some businesses will have more than one customer or buyer persona, for instance a Real Estate agency will have several customer personas because they also have investors and people looking for rental properties who will have different sets of needs and motivations.  By understanding these needs and behaviours the Real Estate Agent can better communicate to these groups.  They can also identify the channels or locations where their customers might be, where they look for information and therefore where it’s best to advertise.

Find out what your customers want.  Find out what they don’t want! 

Take the time to really understand your customer. Knowing details about their purchasing behaviour and history will help you to more effectively communicate ‘value’ to your customer.  You know what they like, you know what they need, you know what they have purchased in the past. This information will allow you to make ‘relevant’ suggestions about products or services that compliment or add value to their business.  Complex buying decisions often require detailed information. You need to work out what works best for your particular product of service, is it a face to face meeting, email, coupon, online advertising? It is most likely a combination of these and it’s likely that several touch points will be required before the message gets through.  Over time you can identify where most of your sales are coming from and which marketing channels work best for you.

Sending your customers information that is irrelevant or bombarding their in boxes with products or services that they would never use diminishes the trust relationship.  This is where a customer’s order history, customer segmentation and customer feedback are important. What did they order last time? What sorts of products or services do they like best? Keeping abreast of changes in their business is also important.  For example: have the decision makers changed? If so, do you need to re-connect and communicate your value to them?

Communicate, Communicate, Communicate.

Whether this is via a phone call to let your customer know about a delay in delivery or regular newsletters that keep your business top of mind. Communicating with your customers is very important. If they are not paying attention to you, then how can you expect to create a long term relationship with them and create loyalty?

If customer retention for small business is an issue for you, consider running a six monthly customer satisfaction survey. Use this tool to identify performance gaps and make changes to resolve these, then regularly communicate with your customers to make sure you are meeting their needs.

Best selling author Ken Blanchard’s quote sums it up. “Feedback is the breakfast of champions.”