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Aron Govil: Customer retention strategies for small businesses

Aron Govil

Customer retention has become vital for small businesses. With the cutthroat competition, retaining existing customers is proving to be more profitable than acquiring new ones says Aron Govil. Not only this but also it costs about five times more to acquire a new customer than retaining an existing one.

This article provides ideas of the most effective customer retention strategies for small businesses.

Strategies:

·          Have unique offers after every purchase

·          Believe in providing excellent service. Keep your client satisfied with the services and products that you offer. If you fail to do so, then they will simply shift to another company where their needs are fulfilled and they can get better value for money spent.

        Develop a good relationship with your customers and provide them with timely information about new products or services that you offer.

Customer retention is vital for small businesses because it can lower marketing costs and protect against competitors, which makes sense when you consider the five times more expensive to acquire than retain a customer.

Here are some FAQs recently asked on the definition of customer retention strategies for small businesses.

Q1. Which is more expensive to acquire a new customer or to retain an existing one?

A1. It costs about five times more to acquire a new customer than to retain an existing one.

Q2. What percentage of customers do companies lose every year?

A2: Customer churn rate is said to be around 5%-20% in different industries and varies from company to company depending on various factors such as quality of products and services, market conditions, etc. This number goes even higher when we talk about SMBs (Small and Medium Businesses). Aron Govil says no matter what size your business is, it’s always better to retain existing customers than acquire new ones because they cost you less and provide you with high customer lifetime value.

Q3: Why is it more effective to retain existing customers than acquiring new ones?

A3: There are many reasons why retaining existing customers is more effective than acquiring new ones. It costs about five times more to acquire a new customer than to retain an existing one. Which makes sense when you consider the fact that it’s harder to sell the benefits of your products and services to strangers. Then familiar people who already know about what you offer. Moreover, there are fewer risks involved in retaining your existing customers. Because they have already bought from you before, so chances of selling them again are higher providing you with high customer lifetime value. You don’t need additional resources for marketing or advertising purposes as well since your existing customers act as brand ambassadors for your company, which means they will recommend your products and services to their family members and friends.

Customer retention is vital for small businesses because it can lower marketing costs and protect against competitors. Which makes sense when you consider the five times more expensive to acquire than retain a customer. Retaining existing customers not only reduces your acquisition costs but also helps you in achieving higher profit margins. With greater efficiency in managing the day-to-day operations of your business.

Customer retention strategies for small businesses:

1.    Have unique offers after every purchase

2.    Believe in providing excellent service. Keep your client satisfied with the services and products that you offer. If you fail to do so, then they will simply shift to another company. Where their needs are fulfilled and they can get better value for money spent.  

  3.    Develop a good relationship with your customers. Provide them with timely information about new products or services that you offer explains Aron Govil.

These strategies can be in use by small businesses in different industries and sectors. Such as retail, education, entertainment, etc., provided they meet the requirements of their industry. Customer retention strategies which are mostly targeting retaining existing customers. Rather than acquiring new ones because it costs around five times more. To acquire a new customer than retain an existing one.

Conclusion:

Customer retention is vital for small businesses because it can lower marketing costs. And protect against competitors, which makes sense when you consider them five times more expensive. To acquire than retain a customer says Aron Govil. Thus, retaining existing customers is proving to be more profitable than acquiring new ones. Not only this but also it costs about five times more to acquire a new customer than retaining an existing one. For this reason, it is important that you develop a good relationship with your customers. And provide them with timely information. About new products or services that you offer so as to ensure their satisfaction and loyalty towards your company. Thus, if you fail to do so, they will simply shift to another company. Where their needs are fulfilled and they can get better value for money spent.

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