Did you know it costs five times more to acquire new customers than to retain the ones you already have? This stat alone should make any business owner stress about customer retention.

That’s why we put together this guide on 8 proven strategies to keep your customers coming back again and again. Whether you run an HVAC company, a law firm, or a local restaurant, these tips will help strengthen relationships with your clientele and have them choose you over the competition every time.

What is Customer Retention?

Before we begin explaining how to retain customers, let’s define customer retention. Put simply, customer retention refers to a company’s ability to retain its paying customers over a long period of time. The goal is to prevent customers from switching to competitors.

For example, take an HVAC company. A customer might call them up for a one-time A/C repair. But the HVAC company hopes the same customer will return to them next time they need a new heating or cooling unit installed. And even better – that they’ll sign up for a yearly maintenance plan to keep that HVAC company servicing them for years to come.

How Do You Measure Customer Retention?

To know if your efforts are working, you need to keep an eye on key performance indicators (KPIs). The following are worth calculating:

  • Customer churn rate – The percentage of customers you’ve lost in a given timeframe
  • Retention rate – The opposite of churn rate. The % of repeat business over time.
  • Customer lifetime value – How much profit a typical customer brings in during their ‘lifetime’ with your brand

Monitoring changes in these KPIs will tell you if your retention strategy needs reworking. If you see room for improvement, consider implementing some of the strategies we explore below. Here’s how to retain customer loyalty for small businesses.

1. Start a Newsletter

No matter what industry you work in, chances are you aren’t the only player in town. Sending out a regular newsletter reminds customers that you exist and keeps your business top-of-mind. Every time they get a message from you, they’re reminded of your business.

In fact, 80% of business professionals say email marketing helps keep customers coming back.

Townsquare Interactive’s business management platform takes the hassle out of setting up automated campaigns. Both Email and SMS options are available, so you can choose the one that resonates most with your audience.

SMS messaging is growing rapidly in popularity. After all, who doesn’t read a text message minutes after receiving it?

When sending out newsletters:

  • Offer subscribers valuable info – not just sales pitches
  • Keep it short and sweet
  • Send at optimal times based on analytics
  • Include clear calls-to-action

2. Build a Community

Humans have an innate need to feel like they belong. When you create a community around your small business, you make customers feel special and connected to your brand on an emotional level.

You’d be surprised how loyal people become when they feel like they’re part of a club. Ways to build community include:

  • Hosting local events
  • Creating private Facebook groups
  • Organizing webinars & conferences
  • Offering VIP access

Even something as simple as an Instagram hashtag or branded swag can make fans feel part of an exclusive group.

3. Start a Loyalty Program

Loyalty programs (also called rewards programs) are among the most popular ways to boost retention these days. These programs reward frequent customers with perks like discounts, freebies, and early access to sales. A Visa/Bond study found that 64% of loyalty program members shop more often to maximize point earnings.

For example, a contractor could offer a discount on a customer’s next project for every three projects they complete. A restaurant might give a free meal for every ten meals purchased. Or a lawyer could offer discounts for referring new clients. Get creative with ways to reward your loyal customers!

4. Step Up Your Customer Service

Here’s an eye-opening statistic: 73% of consumers say they’ll switch companies after just a few bad customer service experiences.

To provide top-notch service:

  • Train employees to have a positive, customer-first attitude
  • Be available 24/7 via chatbots, email, social media, etc.
  • Respond quickly to inquiries and issues
  • Make returns and refunds easy if applicable
  • Go above and beyond to make customers feel valued

When customers know they can count on you for a great experience every time, they’ll keep coming back.

5. Personalize Wherever Possible

Personalization makes customers feel special. Like they’re not just another number in your customer base but that there is a personal connection. According to McKinsey, 76% of consumers say personalized communication makes them more likely to buy from a company.

Use their name in emails, offer them products based on past purchases, and customize recommendations. Tools like Townsquare Interactive simplify the process so any small business can benefit.

6. Highlight Your USP

What makes your business unique? If customers can get the same service cheaper or closer to home elsewhere, they have no reason to remain loyal.

Your USP is that special thing that sets you apart, whether it’s a one-of-a-kind product, unbeatable customer service, or deep industry expertise. Figure out your USP and shout it from the rooftops! Highlight it in your marketing so customers know why they should choose you over the competition.

7. Become an Industry Thought Leader

Another way to make customers come back is for them to see you as THE resource on a topic. Position yourself as an expert in your field to build trust and credibility. The more you demonstrate your expertise, the more customers will trust your offerings. Some ways to show thought leadership:

  • Write blog articles and whitepapers
  • Create informative videos
  • Speak at industry conferences
  • Offer helpful tips and resources on social media

8. Say Thank You

This final tip for how to retain clients ties into customer service but deserves its own section: Don’t underestimate the power of gratitude! Research shows that thanking customers can go a long way in boosting retention.

Send handwritten notes, offer loyalty rewards, or even verbally express appreciation for their business. Customers want to know you value them.

Keep Customers Coming Back With Townsquare Interactive

With the right approach, small businesses can thrive in any environment. These strategies help nurture customer relationships so you can stop worrying about churn and focus on sustainable growth.

Retaining customers requires effort but pays dividends over time. Because loyal fans spend more and refer others to your brand. So rather than wasting money chasing new customers, invest in improving retention. You’ll quickly see your hard work pay off in the form of repeat sales and word-of-mouth referrals.

Townsquare Interactive’s business management platform gives you the tools to take your retention to the next level. Contact our team today to get started.

More From 102.7 KORD