When you first started your small business, you focused on following your business plan and getting everything running. During this hectic time, one of your key priorities was boosting your brand visibility to secure as many new customers as possible.

Once your small business has reached a certain level of stability, you can start focusing on boosting business sustainability. This is when many entrepreneurs begin prioritizing customer retention in addition to acquisition. After all, studies suggest that acquiring a new customer can cost five to seven times more than retaining an old one, making retention more cost-effective for growing businesses.

Whether you’re running a thrift store, pet grooming business, or a bakery, here are three top customer retention strategies you can try.

1. Improve your products or services.

A survey of founders of businesses that failed found that these were the most commonly reported reasons why the founder thought the business failed:

• 42% thought there was no market need for their services or products
• 17% thought that they failed because of a poor product offering

One way to secure repeat business is to show your customers that you’re listening to them and want to provide an offering they’re excited to purchase. Start by sending out surveys to previous customers and asking them how they feel about their purchases. Your surveys might include questions like:

• On a scale of 1–10, how satisfied are you with our product/service?
• On a scale of 1–10, how would you rate the quality of our product/service?
• Do you feel that the product/service was worth the price you paid?
• How do our products/services compare to other businesses you’ve purchased from?
• On a scale of 1–10, how likely are you to purchase from us again in the future?
• Would you recommend our products/services to your friends or family? Why or why not?
• What is your favorite thing about our products/services?
• What areas of our product/services do you think need improvement?

Rather than sending a survey immediately after a purchase has been made, send it a few weeks after, so the customer has had time to use your product or reflect on the service they received. At that point, they’ll better understand it and can provide more valuable feedback.

Once you’ve collected customer feedback, analyze it for any popular sentiments. For example, if you sell tote bags, your clients may ask you to make them in different colors or sizes. If any particular colors are requested more than others, add them to your lineup to boost customer satisfaction and encourage customers to make another purchase.

For businesses that sell secondhand products, like thrift stores, this feedback may change the way you source your inventory. Let’s say your customers indicate they prefer vintage, one-of-a-kind items rather than inexpensive bargain items. In that case, you might adjust your sourcing strategy to focus more on consignment items, estate sales, and auctions.

Aside from surveys, you can also evaluate how to improve your offerings based on the first-party data you’ve collected from your customers. Information like purchase history, return rates, and online reviews gives you a good idea of what products and services may need tweaking. However, they may require you to set up more systems than you’re currently prepared to. Start with surveys and keep this tip in mind for the future, when you have the capacity to implement new tools.

2. Deliver an excellent customer experience.

When customers enjoy shopping at a store, they’re more likely to spend more money and patronize that business in the future. In addition to improving your products and services, consider how you can deliver a better customer experience.

Here are a few elements that you might tweak:

• In-store layout: If you have a physical store, your store layout should make it easy for customers to browse your items and make a selection without feeling too crowded or rushed. Your items should be clearly labeled and easy to find so customers can easily navigate through your facilities to find what they need.

• Store atmosphere: The atmosphere of your store also greatly contributes to the customer experience. Ideally, it should be well-lit, clean, and nicely decorated. You might even play music that fits with your business’s theme and vibe, as long as it’s not too loud.

• Online shopping experience: If you run an online store or an e-commerce website alongside a physical location, create a website that’s easily accessible and lists your products or services clearly. The site should also be mobile responsive, ensuring that customers can make purchases easily, no matter what device they’re using.
• Customer service: Provide prompt and polite customer service to customers needing help. Encourage a customer-centric approach where you prioritize high-quality service at every level and interaction, from front-line employees to leadership.

Nowadays, businesses are under more scrutiny than ever around customer service issues, product quality concerns, and perceived unethical practices. A great customer experience greatly alleviates these concerns and helps you stand out from the competition.

Let’s take Chewy as an example. This business sells pet food and products you can set up repeat deliveries for to ensure your pet always has what it needs. In 2022, the brand went viral on Twitter (now X) for the service it provided to a customer whose dog passed away. When she contacted their customer service team and asked to return an unopened bag of dog food, they gave her a full refund, told her to donate the dog food, and had flowers delivered to her.

This act of kindness that Chewy delivers to customers who experience their pet passing boosts the customer experience. Plus, it solidifies the brand in their customers’ hearts by reinforcing that their customers are part of the Chewy family.

3. Implement a loyalty program.

A dedicated loyalty program gives structure to the relationship you want to build with your customers. It provides an incentive for customers to patronize your store again and again, leading to high retention rates and more sales.

MassageBook’s guide to small business marketing outlines three types of loyalty programs you could implement:

• Rewards: In a rewards program, you provide clients with discounts or freebies after a certain number of purchases. These programs are commonly points-based or tiered but can also follow a punch card system. Oftentimes, they include small gifts for birthdays as well.

• Referrals: For this type of program, you’ll ask clients to refer their friends and family to your business. Once the friend makes a purchase, both they and the referrer will get a gift, usually a discount on their next item or service purchased.
• Memberships: Membership programs best suit service-based businesses that clients are encouraged to use regularly, such as a gym or a pet grooming business. Generally, a customer will pay for a membership upfront to access select services at a discounted rate. They might also receive priority treatment when scheduling appointments and other small perks.

According to ThriftCart, the right point of sale (POS) system will make managing these loyalty programs easier. A dedicated POS system will store customer information, such as contact details and purchase history, making it easier to create personalized experiences for your customers. Plus, you can track any rewards they’ve accrued, successful referrals they’ve made, and membership perks they can use!

These three strategies will help you form a solid foundation that you can build upon to improve customer retention rates. Once your small business grows and you have more resources and staff time, look into additional tips and strategies to boost your reputation and increase loyalty, from implementing corporate philanthropy programs to incorporating environmentally sustainable business practices.

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ABOUT THE AUTHOR

Kyle Payton

Kyle Payton is the general manager of ThriftCart, an all-in-one point-of-sale product assisting nonprofits and small businesses in navigating the complexities of retail.