This document provides five tips for customer retention for entrepreneurs: 1) focus on retaining existing customers rather than acquiring new ones since retaining customers is easier and more profitable; 2) customer retention has a major impact on company profits so it should not be underestimated; 3) implement an effective customer retention program to identify and promote loyal customers; 4) understand actual customer behaviors and needs rather than assumptions to improve retention; 5) engage customers through social media, personalized communications, and relevant promotions to encourage repeat business.

1. Five Customer
Retention Tips For
Entrepreneurs

2. • Going for new clients?
– Entrepreneurs fail to effectively address the need to retain customers
they already have.
• It’s far easier to sell to existing customers
– About 50% easier according to Marketing Metrics
• Startup entrepreneurs find it more exciting to focus on
customer addition
– A bird in the hand is worth two in the bush

3. Never Underestimate
the Value of Retention
• Do you think customer retention plays a relatively minor role?
– According to Bain and Co., a 5% increase in customer retention can
increase a company’s profitability by 75%
– 80% of your company’s future revenue will come from just 20% of
your existing customers. (Gartner Group statistics)
– Attracting new customers will cost your company 5 times more than
keeping an existing customer.

4. Implement an Effective
Customer Retention Program
• Customers don’t owe you their loyalty
– You have to earn it
• What customer retention program does?
– Identify, track, and custom promote to those customers who are most
likely to become loyal, long-term sources of revenue.

5. Avoid Misreading
Your Customers
• Misunderstanding how customers think keep retention rates
low
– 80% of companies surveyed said that they offer superior customer
service, but only 8% of their customers agreed with them. (Harvard
Management)
• Why your customers followed you on social sites?
– companies listed discounts and purchases among the least important
reasons.
– Customers listed discounts and purchases as the major reasons for
following a company on a social site
• Focus more on actual customer behavior, not on the
predicted behavior

6. Engage Customers Through
Social Media
• Dial down the corporate presence
– Give your customers a voice and a forum
– Let them build the traffic
• Have Facebook fans and twitter followers? Stay Engaged
– Immediately respond on whatever is being said (both good and bad)
about your company.
– Identify customers (followers) who are the most loyal, send them
personalized “thank you” emails, incentives, coupon codes
– Always want to take care of your social media savvy customers, they
can either be your most powerful advocates or your biggest PR
nightmares.

7. Run Relevant Promotions
• Remember?
– 80% of your future revenue will come from 20% of your current
customers.
• keeping customers actively engaged with your brand
– Make them feel good about doing business with you
– Encourage them to do more of the same
• On a more personal note:
– Promotions such as sending promotional gifts, birthday cards, or
staying in touch over the holidays

8. • Being passive about customer retention only leads to greater
attrition
• Companies that play an active part in communicating with
customers to keep them engaged have better customer
retention program; greater customer loyalty