We all know almost every big business started out small. What do these companies have in common that enables them to move to the next level? Success in business depends on a number of factors: product, quality, pricing, marketing, advertising, promotion and so on, but even excelling in all these areas might not be enough to earn a small business success if it fails to win customer loyalty to make its valuable customers keep coming back for more.

Customer retention is always cheaper than acquisition. So, if you are a small business owner it makes great business sense to find out how you could keep your customers coming back. This requires you to identify the buying patterns of your customers and understand why they choose to do business with you over a competitor and vice versa. Once you get the answer you can then move to the next stage: improve your strategy to encourage your customers to do more business with you.

Some customers, for example, may always choose to do business with you. They are your prized possessions, but this does not mean you can be complacent. Always keep in touch with them: use e-mail to communicate, send them birthday greetings, fax them a brochure, and so on — ask them if there is something they are not happy with. Also, give them a way to get rewards such as through a customer referral reward scheme. Such things normally go a long way with customer loyalty.

In contrast, you may find another group of your customers who are doing only a small part of their business with you. They are buying products from several other suppliers. The reasons may vary: your product range may not be extensive enough to deliver all what these customers want, their major supplier may be in a much stronger position than your business, you may be offering a lower margin, the strength of your product may not be communicated well and, as a result, is going unnoticed, and so on.

Some other customer groups with varying customer loyalty may also exist, such as those who buy mainly from you but their loyalty slips sometimes when they find something better offered by your competitors, or customers who buy from you half the time and from one of your major competitors other times. For successful customer retention, you must identify these different customer groups — who are loyal to your business and to what extent, and then look at ways to encourage your existing customers to do more business with you.

I invite your opinions.