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9 customer retention strategies – tips for small businesses

5-minute read

Smiling business owner and customer paying by card at flower shop
Catriona Smith

Catriona Smith

30 January 2023

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Finding customers can feel like an uphill battle at times, and it can certainly be expensive. So how do you make sure that once a customer has visited you once, they keep coming back?

Here, we’ve put together our top tips for how small businesses can grow customer loyalty and drive sales.

1. Get to know your customers

More and more these days people find themselves dealing with faceless corporations and robotic websites. Your business is likely to make more of an impact if you can personalise it to your customers.

That might involve engaging with them on social media or sending personalised emails. If you interact with your customers in person then getting to know them and what they like will help your business feel as if it’s going the extra mile – just for them.

2. Advertise loyalty schemes

These days, few people will leave the house without their Nectar card - it’s one of the most successful customer loyalty schemes ever launched.

Of course, setting up something like Nectar is beyond the capacity of most small businesses, but you can still create a loyalty scheme to tempt customers back. You could go for a stamp card, rewarding customers after a certain number of purchases, or offer them something on the anniversary of their first custom.

3. Offer discounts and giveaways

Everyone likes to think they’re getting something for nothing, which is why discounts and giveaways work so well for promoting customer loyalty.

This can tie into loyalty schemes. If you’re offering a prize draw, you could make this available only to people who have bought something from you in the past month – just make sure you tell them about it in advance.

And always keep your profit margin and ROI (return on investment) in mind if offering something for free.

Keeping customers happy is something the 2022 winner of The Apprentice talked about in a webinar for Simply Business. Harpreet Kaur, owner of a dessert parlour business, said: “Ensure that you’re still making sure it's financially viable when you're calculating these discounts, but again don't be afraid to invest in your customer.”

4. Ask for feedback

You can try all sorts of customer retention techniques, but if you don’t know which ones are working you could be putting money into something that’s getting you no return, or giving up on something that’s actually doing you good.

How you gather feedback is up to you.

If you run a business where you interact with customers, you could ask them to fill in a feedback form or just talk to them about a scheme you’ve offered to see if they liked it.

If your business is mostly run online, you could add a survey to your website using a software provider, or simply email your customers with a Google form.

Whatever you do, use this information to form habits for success and drive your business forward.

5. Add more value

Another way to make people feel valued and that they're getting a good deal is for you to offer something extra that your competitors won’t.

For example, when you buy your insurance with Simply Business you get a monthly newsletter with a roundup of all the best content from our Knowledge Centre, as well of details of other exciting events we have planned.

Is there something you can offer loyal customers? What about early access to an online sale, or exclusive access to a new product launch event?

6. Deliver great customer service

One of the ways you can make your business stand out in a competitive marketplace is by offering really good customer service.

If you – and everyone who works for you – gives your customer the best experience possible, they’re going to be much more keen to come back.

For example, if you need to increase your prices, sending an honest, empathic price increase notice to customers shows you value them.

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7. Use analytics and automation

As a small business owner, freelancer or sole-trader, you already have a lot on your plate with, well, actually running things. Adding in this sort of stuff can feel like a real chore that you just don’t have time for.

However, given how valuable customer retention can be to a business, it’s something you should spend time on. So how can you strike the right balance? Well, anything you can get to run automatically will make life a lot easier.

Automatic emails aren’t too difficult to set up. There are programs you can use to set up emails that will trigger when someone signs up with you, for example.

And if you’re too busy for feedback, you can use programs like Google Analytics to see how many people are viewing your website. If you set up a new page when you have an offer on, or even add it to an existing page, you’ll be able to see how popular that offer is.

For the less digitally inclined, if you have physical premises you can have a customer counter installed on your door to see how many people are coming in on any given day. If it goes up when you have a promotion on, you’re probably on the right track.

Our guide to increasing footfall for retail shops has more on this topic.

8. Be authentic

One of the most important aspects of customer loyalty is being genuine. A helpful thing to try is putting yourself in your customer's shoes. What would you want in their position? What would make you keep coming back to a business again and again?

For example, don’t just partner with a big business on a promotion if they don’t feel aligned with your values. But if you’re a fitness instructor and a smoothie business asks to work with you on a giveaway, that might feel like a natural collaboration.

How to collaborate with other businesses

Watch three inspiring entrepreneurs talking about their tips for collaborating with other businesses.

…and show your values

A big part of being authentic is showing your personality. Can you show a bit more of who you are, and the values that resonate with you as a brand? Whether that’s being a B Corp or adding a sense of humour to your social media posts, if customers actually like who they’re buying from then you’ll be on the right track.

There are lots of techniques for customer retention, but you know your business and those who use it best. Keep that in mind and it will be hard to go far wrong.

Wondering how to evolve your tone of voice? Conversational? Expert? Funny? Our guide will help you find the voice that’s right for you and your industry.

9. Create a subscription model

If you have a product or service that people can subscribe to, you’ll have customer loyalty built into your business model. No more stress about where the money is coming in from – just the security of monthly payments from customers who sign up.

From books and recipe boxes to fitness classes and dog walking, the types of subscription businesses that work are endless. Just think about if you sell a product that people need to keep refilling (like wine, for example) and how you can offer something extra if they sign up. Whether that's a free bottle or a hand-picked selection of your wines of the month, give customers a reason to sign up.

On the other hand, if you run a service (like window cleaning) consider how your pricing will encourage customers to sign up to a regular agreement.

These tips should form part of a bigger marketing strategy, but nurturing the customers you have to encourage brand loyalty is key to making your business a success.

What customer retention strategies do you use? Let us know in the comments section below.

More small business guides and resources:

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Photograph: Rido/
Catriona Smith

Written by

Catriona Smith

Catriona Smith is a content and marketing professional with 12 years’ experience across the financial services, higher education, and insurance sectors. She’s also a trained NCTJ Gold Standard journalist. As a Senior Copywriter at Simply Business, Catriona has in-depth knowledge of small business concerns and specialises in tax, marketing, and business operations. Catriona lives in the seaside city of Brighton where she’s also a freelance yoga teacher.

We create this content for general information purposes and it should not be taken as advice. Always take professional advice. Read our full disclaimer

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