Small businesses are investing more of their time, money and resources in strengthening relationships with existing customers versus acquiring new ones, according to a recent report from research firms Manta and BIA/Kelsey.
The report, titled “Achieving Big Customer Loyalty in a Small Business World,” details findings from approximately 1,000 small business owners who belong to Manta’s online community, surveyed in January 2014. The survey inquired about the business owner’s habits and focus on new and existing customers, as well as their current and future plans for implementing and managing customer loyalty programs. BIA/Kelsey reported in 2012 that small business owners prioritize customer acquisition over retention at a seven-to-one ratio. But business owners have apparently shifted gears, and of those surveyed 61% reported more than half their annual revenue comes from repeat customers rather than new, with repeat customers spending 67% more.
Other findings from the study include:
• 14% of small business owners are earmarking the majority of their annual marketing budget to acquiring new customers, with 20% investing more time and effort to acquire new customers.
• 34% of small business owners operate a loyalty program, but the majority of programs put in place are offline, failing to take advantage of technologies that offer analytics and customer insight.
• 46% of small business customer loyalty programs are digitally run and managed, but 50% of small business owners rely on word-of-mouth or paper-based programs.
Source: Manta and BIA/Kelsey