The specific steps one must take to improve customer acquisition and retention will vary according to several factors, including the type of business, the business's advertising and operating budget, the region in which the business operates, the intended audience for the business, and various timing and implementation considerations. An examination of the business itself is usually the first step in customer acquisition and retention, and having a business plan in place will help the owner immensely. If at all possible, it is important for the owner to set reasonable goals for acquiring and retaining customers, and to research different advertising options that will reach the target audience.
Many business owners mistakenly believe that a wide campaign of advertising through all media is a great way to improve customer acquisition and retention. In fact, this method may end up costing the business owner a significant amount of money for little reward. The best strategies for customer acquisition and retention are very focused and prepared specifically for a target audience; if, for example, the business owner wants to reach new customers by advertising on the radio, he or she may first want to listen to that station regularly to get an idea of who is listening. If the business caters to the elderly, it does little good to advertise on a rock station, as elderly customers are probably not likely to be listening. Asking the radio station about the demographics of the listeners is an important first step.
Retaining customers is just as important as finding new ones. Many business owners make the mistake of ending a transaction after payment or the initial interaction. Business owners should instead improve customer acquisition and retention by maintaining an open dialogue with customers. Mailers with special offers for past customers often work well for two reasons: first, the offer improves the chances that the customer will come back for more services or products; second, if that person has a positive experience, he or she is more likely to tell others about it, thereby giving the business owner free advertising.
Loyalty programs often keep people coming back to a business. Some restaurants offer punch cards, for example, that allow a customer to get a free lunch after he or she has dined at the restaurant a certain number of times. This is good both because it brings a loyal customer back through the door, and it gives the business owner free advertising by word of mouth from a satisfied customer.