Marketing 3 min read

Small Businesses Are Not Focused On Keeping Customers Says Survey

The success of any business depends on different factors, one of which is customer retention. However, a new study revealed that small businesses don't exert much effort to keep their customers. Here's why.

Image courtesy of Shutterstock

Image courtesy of Shutterstock

The goal of every commercial business is to increase sales. One essential way of doing this is to figure out how to retain current customers.

However, a report from The Manifest suggests that only 6 percent of small businesses are focused on keeping their customers. The result is a bit odd because the primary goal of digital marketing is to increase sales.

So, why this odd trend?

According to the data, small businesses don’t think it’s important to engage with existing consumers mainly because of budget constraints. Alongside insufficient fund and resources, these businesses also rely on the in-house team to engage their existing clients.

Unfortunately, that doesn’t always turn out well.

While a few workplaces have qualified staffs to handle this task, most organizations don’t enjoy such privilege.

The Manifest Report provides insight into how small businesses can benefit from various digital marketing efforts.

According to the author, Emily Clark:

“Small businesses realize the value of digital marketing but can improve their strategy with better resources and goals.”

How Small Businesses Are Failing At Keeping Current Customers

Image Credit: The Manifest

For the study, the researchers collected data on the annual budget and marketing resources from 529 small businesses across the United States.

After the analysis, the researchers noted that all the businesses made an effort to increase their sales. However, the method explored varied with each organization.

For example, very few of the businesses engage their existing customers, and as a result, miss out on easier sales.

The survey suggests that only 6 percent of the businesses are focused on retaining customers. That means the remaining 94 percent may not fully understand the advantages of this marketing technique.

Compared with acquiring new customers, it’s much cheaper to engage the older ones. While the success rate of selling to a new customer is between 60 to 70 percent, the new customer stands at a measly 5 to 20 percent.

This makes you wonder; why are small businesses not taking advantage of this enormous opportunity?

Lack of Resources and Marketing Budget

As far as customer engagement goes, not only do small businesses lack the financial resources to make it happen but the knowledge-based one too.

About 60 percent of small businesses depend on their in-house team to handle their digital marketing strategy, while 33 percent use marketing software.

Since digital marketing plays an essential role in customer engagement and retention, it’s application makes a lot of difference. The marketing budget also plays a major role. In most cases, it’s the primary determinant of how much an organization can reach.

Unfortunately, most small businesses’ marketing budget is in a state of flux. As such, they’ve never been able to enjoy the benefit of this marketing strategy consistently.

Read More: 5 Ways to Improve Your Small Business Using Big Data

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Sumbo Bello

Sumbo Bello is a creative writer who enjoys creating data-driven content for news sites. In his spare time, he plays basketball and listens to Coldplay.

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