June 18, 2012

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2. Focus on loyalty.

Having made the purchase from you at least once, your current customer base is well aware of your “niche” in the market, your unique selling proposition (USP).  At the very least they have accepted it before, so it’s not likely that you’ll need to start from scratch and build a new relationship.

3. Consider a customers’ lifetime value.

The first purchase made by a customer is just the beginning. The true value lies in subsequent purchases made in the future. Small businesses can encourage this by cross-selling and generating back-end sales — offer your customer (who has already purchasing something from you before) the opportunity to purchase something else at a discount or bundled incentive.

This is how you convert a $100 sale into a $1,000 sale and then a $10,000 sale without any extra cost. Maximizing the lifetime value of your customers (i.e. the total value of business you get from a customer for the complete lifetime of their relationship with your company) can do wonders for your business in the long run.

How much do you spend to retain existing customers? How does it compare to your strategy for generating new customers? Let me know in the comments section below.

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Photo Credit: Blanco

Brenda Lyttle is a small business finance blogger and representative of Free Credit Reports Instantly, a company that provides monthly free credit scores and financial assessments of your business.

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