The cheapest growth a business has

Acquiring a new customer costs several times what keeping an existing one costs, and most businesses spend almost everything on the first and almost nothing on the second.

Why retention compounds. An existing customer already trusts you, already knows how you work, costs nothing to reach, buys more readily, and refers others. A business that keeps ninety percent of its customers and one that keeps seventy percent look similar in any single month and are completely different businesses after three years.

Run the arithmetic once. If you lose a fifth of your customers annually, a fifth of your marketing effort is replacing what you had rather than growing. Reducing that loss by half is equivalent to a substantial increase in acquisition, at no cost.

Where retention is decided. Not in a loyalty programme. In whether the product does what was promised, whether problems are handled well, whether the customer feels remembered, and whether anybody contacts them between purchases.

The biggest single cause of losing a customer is feeling ignored, which is more common than dissatisfaction with the product. A customer who never hears from you between purchases is one with no reason to prefer you over the next alternative.

And most of it is cheap. A message after delivery, a reply within the hour, remembering what they bought last time. These cost almost nothing and they are the things small businesses most often do not do.