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Why Is Customer Retention So Important For Your Business?

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customer retention

It is sometimes hard to believe that so many businesses disregard existing customers and devote their resources to potential customers, and though it is always valuable, it does not have nearly the same number of gains.

Customer retention means satisfying existing customers, so they continue to choose to buy from your business over competitors, and it is considered that it takes at least 4 purchases for a customer to consider themselves loyal to a brand. If a customer is loyal to you as a business, you should be loyal to them in return. Here we have explained why customer retention is so important to your business so you will continue to be loyal to them.

Marketing Becomes More Affordable

Not many people enjoy being marketed towards, especially through unwanted emails, ads, or direct mail, except for those who are loyal and on the hunt for the next discount. Existing customers are more likely to appreciate when a brand reaches out to them, especially if it benefits them for being a regular buyer.

Retention marketing is always favoured for larger businesses as it has more benefits and is more cost-effective. Concerning your marketing budget, it will go further when you prioritise existing customers over new ones. After all, they are the ones who are familiar with your products and services, so you don’t have to go all out with expensive features to impress them. They have more brand awareness, lowering your costs in different departments such as customer support as they know what is expected through delivery of the products or services.

Though marketing for customer retention may be cheaper than acquisition, it is not necessarily easier. Read this guide to retention marketing for a more in-depth explanation into retention marketing and how it can be beneficial to your business.

Repeat Profit

Loyal customers should not be taken for granted, especially when it comes to your profit. Not only are they likely to make regular purchases, but they tend to opt into spending more money when they return, and many have said that they are unlikely to go to other brands to purchase products or services in the future. Proving their loyalty as a customer as they believe that your businesses products or services are superior to those of your competitors, as your business recognises with their wants and needs more.

It is recommended to take note of your loyal customers buying history and in the future, you can recommend related products in personal marketing methods. This is especially true when it comes to new products as you can encourage purchases, due to your mutual trust, making them more likely to check out new products and be open to price increases.

Free Advertising Through Word-Of-Mouth

Word-of-mouth is a well-known marketing tactic used, yet it is not up to the company, it is reliant on the customer. In terms of customer retention, the customer is loyal to the business, they will have positive experience and have belief in the brand. Despite all the efforts through various marketing strategies, word-of-mouth always comes out on top as most people are still strongly influenced by referrals as 92% said they trust recommendations from friends and family.

People will always choose those close to them to trust over what they see on social media and other forms of marketing. Your loyal customers are practically free marketers for your business and will be your best source for new business.

Gain Valuable Feedback

Feedback is crucial to any business, but when it comes from a loyal customer, it gains value as they put trust in your business for a longer period of time. As customers become loyal over time, they will not only see your improvements, but will notice areas which could be improved further, so it can be beneficial to help the growth of your business. This can be done as simply as putting up a poll on your social media or sending surveys offering rewards after a purchase has been made. This can further increase sales and bring in new business as you have listened to concerns.

When it comes to customer loyalty, a tip when it comes to negative feedback is to respond and provide support, in doing so you will show your dedicated to your customers and wanting to help make their situation correct, hopefully resulting in repeat business. As many consumers said if feedback is ignored, they may be unlikely to make another purchase.

Poor customer services experiences can make or break a business in terms of profit. Though, customers who consider themselves loyal sometimes will let a small issue go ignored if they have put trust in the company for years. But if they find it happens on a regular basis, there is potential to lose your most dedicated customers, therefor losing you money.

Your Brand Will Stand Out

Most brands like to put their focus on acquisition, which makes retention marketing all the more appreciated as you show the value their loyalty means to you.

This is where you need to consider how many businesses that you have made purchases from, have continued to make direct contact with you, not including the average subscriber list bulk email. Here we mean personalised emails or other forms of marketing specifically for you with recommendations and offers. Doing this can dramatically change how your customers see you as a business, it shows how you value them.

More Space To Make Changes

Loyalty is one of those complicated things when it comes to changes. Too many changes and you could lose business, especially if you are a well-known established business with a large customer base. As a small business though, you have the opportunity to make dramatic changes, such as changing your website design, adding in a new product line, or even going as far as to changing your logo, however, be cautious when doing so as you still want your regulars to recognise you.

The end goal of customer retention is not to scare them off, as if you are not gaining new customers, you do not want to go losing the ones who have stuck by you. Hence, show your loyalty to them as well as theirs to you.


Kossi Adzo is the editor and author of He is software engineer. Innovation, Businesses and companies are his passion. He filled several patents in IT & Communication technologies. He manages the technical operations at

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