What Are the Benefits of Customer Retention?

Tiffany Manley

Although gaining new customers is important, customer retention is important as well. Customer retention involves a company continuing to develop its relationships with its current customer base. This might seem like additional work, but a company stands to benefit greatly from implementing customer retention practices. Some of the benefits that a company might experience because of customer retention are keeping its current customer base, maintaining accurate customer information, acquiring referral business, becoming an authority in its field and a better work environment.

Maintaining an open dialogue with customers may help businesses retain customers.
Maintaining an open dialogue with customers may help businesses retain customers.

A company that keeps its current customer base is poised for consistent growth. Acquiring new customers is important because it helps a company grow, but maintaining relationships with current customers shows that the company cares about those who have decided to do business with it. Customers enjoy doing repeat business with a company when they feel that the company is genuinely concerned about them and their experience with the company.

A company that keeps its customer base is poised to grow.
A company that keeps its customer base is poised to grow.

It might not seem like an important aspect of customer retention, but maintaining accurate customer information is very important for a company. By keeping accurate records of email addresses, phone numbers and mailing addresses, a company can send its customers information during future marketing campaigns or keep them apprised of developments that they might find important. In addition, information such as birthdays, anniversaries and customer favorites might be used to customize a customer’s experience with the company.

Most businesses agree that referrals are one of the most important and effective ways to gain new customers. By focusing on customer retention, a business stands a much better chance of gaining referrals from its current customer base. When a customer feels like his or her needs are being cared for and his or her business is greatly valued, he or she will want to let others know about the great experience that he or she had with the company.

By paying attention to the current customers, a business owner might become an expert in his or her field. Being tuned in to current customers and working hard at a customer retention plan means that a business owner knows what customers want, how to make that happen and what resources are available in his or her specialty. Customers might feel compelled to go to the owner for insight instead of choosing unreliable options.

Most of the focus of customer retention is outward, but a business also might enjoy internal benefits. When customers feel appreciated, they are less likely to become hostile in situations such as a miscommunication or error. This can help employees be less defensive and more willing to eagerly help customers, which might help them enjoy their working environment more.

Loyal customers are important for almost any business, but they can be vital for car dealerships.
Loyal customers are important for almost any business, but they can be vital for car dealerships.

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Discussion Comments


I have found that a good way to keep customers is to let them know you are thinking of them even when they are not looking for your services or whatever you are sailing. I keep a record of all my customers and a little something about them on index cards. Sometimes I'll send a card on their birthdays. If one of my customers has a child graduating from college or high school, I'll send a graduation gift or a card just so the customer will remember me when he needs my services again.

This has worked well for me. People are more likely to seek you out when you make the extra effort. Otherwise, there are plenty other people who are doing the same job as I do, and the customers can choose one of those people instead of me.


Before I began my first business, I worked with a friend who had a carpet cleaning business. He was working another full-time job when he started the carpet cleaning. He started small and depended a lot on word of mouth. Someone he did a job for would tell a friend, neighbor or family member about him and he would get another job that way.

That first year he got the customers slowly, not enough to consider giving up his full-time job. However, by the second and third years he was getting a lot more calls. Since most people don't have their carpets cleaned as often as they should, it was during the second year before he started getting repeat customers.

He didn't know it, but he had retained many of his first customers simply by doing a good job and talking with them when he was doing the work. Without those repeat customers he would never have been able to quit his other job and run the business full time.

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