Small Business Owners Share Their Best Client Retention Strategies

The Importance of Client Retention

Client retention is, in fact, one of the most important aspects of running a small business:

• Yotpo, an ecommerce marketing firm, found that in 2025 gaining a new customer cost 5x to 25x more than keeping an existing customer.

• Retaining existing clients also boosts a small business’ average customer lifetime value (CLV, the estimated total revenue a business can expect from a single customer throughout their entire relationship) and long-term ROI. On some loan applications, these metrics may be important.

• A study from DemandSage showed that roughly 65% of a business’ revenue, on average, comes from existing clients.

• A study by the Bain & Co. found that increasing customer retention by 5% can boost profits by 25% to 95%.can boost profits by 25% to 95%.

Many small businesses may also have trouble keeping clients during times of economic turmoil. When the prices of gasoline and food rise (as they currently are, or supply chain bottlenecks cause inventory fluctuations, many businesses are forced to raise prices, which in turn may prompt their clients to leave. This is just yet another pressure that may force small business owners to be creative in their client retention strategies.

What are the Best Client Retention Strategies?

A small business can do some general things to keep the churn rate (the percentage of clients who stop buying over a certain time period) to a minimum. A small business can invest in good customer relationship management software and maintain a steady mix of employees dedicated to client service as well as getting new customers.

What are the most successful client retention practices that small business owners practice, especially during times of economic turmoil? Biz2Credit received answers to this question from every day small business owners across the U.S. These small business owners wrote to Biz2Credit in detail about their best client retention strategies through an online service called Help A Reporter Out (HARO). The SMB owners who responded did so with the knowledge that they would be quoted in this article.

Solve the Next Problem

Ravi Parikh, founder of Texas-based financial planning and account firm Parikh Financial, said the key to keeping existing clients is to address the client’s next financial challenge in advance – often before the client knows about it.

“Most businesses focus on delivering the service that was originally purchased, but long-term retention comes from anticipating what the client will face six or twelve months down the road,” Parikh said. “Instead of waiting for those issues to become emergencies, we proactively bring them up and walk through possible solutions early. That turns the relationship from service provider into strategic partners. Anticipation builds loyalty in a way reactive service never can.”

Emotional Connections

One important way to keep clients is simply following up after they’ve been secured. Mushfiq Sarker, founder of Illinois-based Webacquisition.com, an online M&A adviser, said that the key to client retention is following up with current clients to keep an emotional connection with them.

Sarker uses a three-pronged approach to client retention:

1. Client tracking. “Business owners should record first how many of their past customers repeat purchases” said Sarker. “I record every repeating buyer - that's who is loyal. We update the data each week. Last year, the proportions were 62% repeat customers, and 38% from new customers. Loyal customers reduce the cost of finding new ones by 70%. I see owners seeking new people after ignoring the money they have already. When busy professionals target repeat buyers, their businesses do not dip.”

2. Post-sale emails. “Sending out a quick thank you the same day after each sale works best. Buyers are instantly appreciated,” he said. “We have a note for them telling them what they might need next based on what they bought the previous time. That in turn quickly leads to another order.”

3. Service Fixes. “Fix weak points at the service flow early enough, as delays are painful for repeat customers. We test the steps individually from order to delivery. Gaps show up each time.”

Following up with clients after an initial sale is an important client retention strategy for any small business, including those in the retail market. Julian Lloyd Jones, CEO of Casual Fitters, a high-end custom tailoring based in New York City and London, said remembering customer preferences and habits and using that information to send them personalized messages until they return has been the key to his success.

“That level of personal attention makes people feel valued and understood,” said Jones. “We also stay in touch in a natural way by letting customers know when new fabrics arrive or when something comes in that suits their previous choices. It is not aggressive marketing. It is more like continuing the conversation. Over time that approach builds loyalty and many of our clients come back again and again because they feel the service is genuinely personal.”

Address Specific Needs

Matt Bowman, founder of Thrive Local, a Texas-based digital marketing firm, said the key to client retention is to focus on the specific needs of their clients rather than try to upsell them or dazzle them with buzzwords. He added that clear reporting structures and communication ensure  trust with their clients.

“We look at platform activity and customer behavior to see what our clients actually need. Some users want us to be brief and direct,” he said. “Others need us to provide intensive, strategic guidance. We help them tackle their most pressing problems, like handling difficult feedback or finding a rhythm to collect more reviews. We ignore the standard playbook because we want our guidance to solve the specific issues that are holding that business back.”

Segment Your Market

Andy Wang, founder of Blue Faucet, a firm that uses AI to help businesses grow, said the key to customer retention is to segment their current customers into categories measuring their likelihood of coming back, send personalized promotions and using AI to automatically handle those tasks.

“By automating the "handshake" between the merchant and the existing customer, we ensure that no one is forgotten, effectively reducing the cost of acquisition by maximizing the lifetime value of every person who walks through the door,” said Cheng.

‘Make the Complex Simple’

Michael Benoit, founder of California-based ContractorBond which sells surety bonds to construction project owners, said because surety bonds can be confusing, it’s crucial to educate his clients on the details of the bond that they have purchased from him. If his clients fully know the details of the bond, they are less likely to be swayed by a competitor.

“If they don't understand what they have and why they can be won over by someone who offers a better alternative or a cheaper one,” said Benoit. “I take actual time to explain coverage using straightforward terms. When the clients know, they trust it and when they trust it, they don't leave.”

He also stressed that simply answering the phone when his clients call, rather than them having deal with a frustrating electronic voice menu, makes a big difference in client retention.

“Contractors communicate with one another and the faster way to lose a client for good is to be difficult to locate when they need assistance. Being reachable matters a lot in a service business, it is the whole relationship.”

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‘Before and After’

Brandon Hartman, founder of Idaho-based RV Heating Warehouse, which sells parts for recreational vehicles, and founder of a store called Bey Warehouse, which sells products associated with the popular children’s toy Bey Blades, said the key to client retention is to make the process of ordering RV parts simple. After the sale, the key to retention is to be accessible.

“I focus on making ordering as easy as possible for my customers,” Hartman said. “On my RV parts business, my customers are trying to identify the correct component for their heaters. If they order the wrong part, that’s a frustrating experience and they may never come back to me after asking for a refund. So, I built parts diagrams and clear model references to help them get it right the first time and make their second purchase come naturally.”

“Another thing I do after a sale is simply to be responsive. I have a background in retail and that taught me that customers remember how quickly you respond when something goes wrong. A fast and helpful reply turns a one-time buyer into a long-term customer.”

Build a Client Ecosystem

Ultimately, client retention is not a one-size-fits-all formula, but a commitment to building a client ecosystem. As these small business owners have demonstrated, the shift from a ‘one-time sale’ mindset to a ‘long-term partnership’ mindset is what separates struggling businesses from thriving ones. By leveraging tools like AI and CRM software while maintaining a human touch through personalized follow-ups, small business owners can protect their bottom line by keeping their existing clients.