I think obsessing over customer retention numbers is hurting small businesses

Tbh, I run a small retail shop in Portland and everyone keeps pushing the 'keep every customer at all costs' strategy. Over 2 years I bent over backwards for people who bought cheap stuff and complained constantly, losing money on 15% of my sales just to avoid churn. What actually helped was firing those customers and focusing on the 60% who spend $50 or more each visit. Has anyone else seen better results by letting some customers walk?

3 comments

3 Comments

grantw326d ago

Bent over backwards and losing money on 15% of sales" - That's actually a good way to put it. But I think the real issue is people confuse "retention" with "keeping bad customers happy." Its not the same thing.

dianaanderson6d agoTop Commenter

Yeah, I read somewhere that most businesses spend way too much time trying to save customers who are just never going to be happy no matter what. It's a tough balance but you gotta know when to let some go.

young.nora3d ago

Boy do I feel this in my wallet. I've got a truck stop coffee mug that's seen more action than my loyalty program, which basically means I've given away more free refills than I've made in profit. You talk about firing customers and I'm over here remembering the guy who complained about the price of a 50 cent candy bar while I was fixing his tire for free. I finally stopped letting people walk all over me when I realized I was basically running a charity for ungrateful folks who wouldn't tip a waitress if she saved their life. Now I just smile and wave when the grumpy ones leave, and my stress level dropped more than my gas mileage on a steep hill.