Small businesses know that existing customers are their bread and butter, and a new report issued by Manta and BIA/Kelsey confirms that. According to the report released today, April 2, small businesses are investing more time and money in building relationships with their current customers, rather than chasing after new ones.
The report polled almost 1,000 small business members of Manta’s online community, and the results, announced in a press release emailed to the Springfield Entrepreneurship Examiner, suggest that small business resources are shifting to retain customers. More than half of small business owners surveyed – 61 percent – reported that over half of their annual revenue comes from existing customers. Even more important is that respondents noted repeat customers spend 67 percent more than new customers. Only 14 percent have allocated a majority of their marketing budgets to acquire new customers.
Yet the report also found that small business owners lack the tools to leverage existing customer relationships. Only 34 percent of small business respondents have a loyalty program, and the majority of those are offline programs – typically paper-based or word-of-mouth programs, such as punch cards.
“Our joint research shows that customer loyalty programs are starting to gain traction in the small business community,” said Jed Williams, BIA/Kelsey’s vice president of strategic consulting, said in the emailed press release. “This finding aligns with BIA/Kelsey’s analysis that over half of small businesses will launch customer loyalty programs by the end of 2014 to help their businesses become more competitive.”
The report, “Achieving Big Customer Loyalty in a Small Business World,” details findings from nearly 1,000 small business owner members of Manta, surveyed in January 2014. It is available as a free download here.