Customer retention is one of the most effective ways local businesses can encourage getting repeat customers, and build long term customer relationships if it’s done the right way. It is one of the most important, and most overlooked, parts of running a successful local business.
Getting a new customer is great, but the real money in most businesses comes from getting repeat customers.
Depending on your business, a person who visits once might spend $20 to $50. A person who comes back every week might spend hundreds or even thousands over time. That’s why smart businesses focus not only on getting customers, but also on retaining them.
While getting a new customer through your door is important, and also exciting, if they never come back, you’re essentially starting over every single day.
Think about the last time you spent money to get a new customer through your door. Whether it was through ads, social media, or word of mouth, that first visit cost you something, whether it was time, effort, or purchasing ads. Now ask yourself, what happens after they leave?
If you don’t have a plan to bring them back, you’re essentially renting your customers for the day instead of building a relationship with them on a long term basis.
Why Customer Retention Matters
Most businesses spend a lot of money trying to get new customers through the door. They run ads, post on social media, and offer discounts. While those things matter, studies show it costs 5 times more to acquire a new customer than to keep an existing one. For a better, and deeper understanding, take a look at this chart that shows a comparison of new customer acquisition and repeat customer retention.
| Feature | New Customer (Acquisition) | Repeat Customer (Retention) |
| Average Cost | 5x more expensive to get through the door | 5x cheaper to bring back |
| Spending Habit | Usually only spends money one time | Spends 67% more on average per visit |
| Success Rate | 5% to 20% chance of a sale | 60% to 70% chance of a sale |
| Long Term Value | Unpredictable (one and done) | Reliable and scalable (monthly revenue) |
That’s why having strong customer retention strategies in place is important. When people return again and again, your marketing becomes more efficient, and your revenue becomes more predictable.
Think about your favorite coffee shop or restaurant. You probably return because you enjoy the experience. A small incentive to come back again gives you an extra push to keep choosing that place over somewhere else.
If you were able to get someone through your door once, the hardest part is done. They know where you are. They’ve tried what you offer. Now you just need to give them a reason to keep coming back.
By focusing on customer retention, you fill the gaps. You stop worrying about where the next stranger is coming from, and start focusing on the people who already know, like, and trust your brand.
Simple Customer Retention Marketing Strategies That Work Seamlessly:
A well thought out approach to retention generally does three things well.
- It rewards customers for coming back. People love feeling appreciated. A points system, a digital punch card, or an exclusive members only offer gives them a reason to choose your business over your competitor next time.
- It keeps your business top of mind. Things like push notifications, email follow ups, and automated promotions help you stay in front of your customers even when they’re not actively thinking about you.
- It helps you increase foot traffic consistently. Instead of relying on random walk ins or hoping someone remembers you, a retention approach creates a predictable stream of returning customers. Studies show that returning customers also spend on average 67% more than new ones.
Even small rewards can make a big difference. For example, customers might earn points for each visit, discounts after a certain number of purchases, a free item after several visits, or exclusive offers for loyal customers. There are plenty of ways to get creative with it depending on your business.
No Need To Deplete Your Margins And Race To The Bottom
The point is that small incentives make customers feel valued. At the same time, they help increase foot traffic without constantly lowering your prices, and shrinking your margin for profit.
Many businesses rely on discounts to attract customers. However, retention focused thinking is smarter. Instead of racing competitors to the lowest price, you build relationships that keep customers coming back.
How Modern Retention Tools Work
Retention tools have changed a lot over the years. Many modern approaches work directly through a customer’s existing phone wallet, such as Google Wallet or Apple Wallet, instead of requiring a separate app download.
A customer visits a business, sees a simple QR code with a compelling reason to scan it, and a branded card lives on their phone from that point forward. From there, businesses can send updates directly to a customer’s lock screen when there’s a promotion, a new offering, or a reminder worth sharing.
Studies have shown that app fatigue is real. Only about 18% of users who download a business specific app continue to use it. Most people simply don’t want another icon cluttering their phone, which is part of why phone wallet based approaches have become popular.
Turning First Time Visitors Into Loyal Customers
If someone walks into your business once, that’s a good start, but the real opportunity begins after that first visit.
With the right approach in place, one time visitors can become repeat customers who keep coming back.
If you don’t have anything in place to bring customers back right now, your competitors might. Every customer you worked hard to bring in could easily end up walking into the business down the street instead.
You’ve already done the hard work of getting them through your door once. The goal from there is turning that first visit into a habit.
Customer Retention Is Part Of A Bigger Picture
Sustainable growth means two things. Attracting the right customers, and giving them valid reasons to return.
Our advertising networks help put your business in front of new customers looking for exactly what you offer. Our “Buy Local First” initiative specifically gives ongoing local discovery, a steady way for residents to find and choose businesses like yours. Also, your website, built through our Website As A Service (WaaS) solutions, is the owned digital presence that represents your business every time someone looks you up.
None of these are a loyalty program on their own, but each can play a different role in building the visibility, customer relationships, and strong digital presence that support sustainable business growth.
Questions & Answers
Why is it better to not use an app for customer retention?
App fatigue is real. Studies have shown that only about 18% of users who download a business specific app continue using it. Most people don’t want another icon cluttering their phone. Phone wallet based approaches through Apple Wallet or Google Wallet, utilizing Pass Kit and Zapier can work directly on a customer’s existing phone, with no download and no login required.
What kind of retention strategies actually work?
Simple, low friction approaches tend to work best. Points for visits, a discount after a certain number of purchases, a free item after several visits, or an exclusive offer for regulars are all common approaches that give customers a reason to keep coming back without requiring complicated technology.
In Conclusion Of Customer Retention Strategies That Work
Customer retention works best as part of a broader growth strategy. While retention helps turn existing customers into repeat customers, strong customer acquisition strategies help keep new people entering the business.
We can help build that foundation through our local advertising programs, consulting, and AI and SEO search ready website development services.
Learn how we can help grow your business with one of our cost effective solutions today!