Small business owners are now spending the bulk of their time and money marketing to existing customers rather than trying to attract new ones, according to a report [download page] from Manta and BIA/Kelsey. That determination is based on a couple of surveys carried out among Manta’s membership, which found 62% of small business owners spending the majority of their annual marketing budgets to retain existing customers. By contrast, some 56% are investing less than one-quarter of their time and effort on marketing for customer acquisition.
That’s a stark turnaround from previous research conducted by BIA/Kelsey, in which more than one-third of SMBs surveyed had claimed to devote the majority of their marketing budgets to customer acquisition, compared to just 6% allocating the majority to customer retention. It’s difficult to conceive of such a wholesale turnaround occurring in little more than a year, suggesting that the varying survey samples may play a role in the difference.
Nevertheless, whether by cause or effect, about 6 in 10 SMBs surveyed for the latest report now earn the majority of their annual revenues from repeat rather than new customers.
While SMBs may have shifted their focus to their existing customers, they don’t appear to have followed suit with greater adoption of loyalty programs. According to the report, only 34% of respondents have a loyalty program in place, a figure which is roughly in line with (in fact, slightly lower than) a previous survey from BIA/Kelsey. Much like that survey found, it appears that SMB loyalty programs tend to not be digital, with only 46% of those small business owners with a loyalty program saying it is digital.
About the Data: The data is based on Manta & BIA/Kelsey Customer Loyalty Surveys conducted in January 2014. Survey #1 polled 589 Manta small business owner members and has a +/- 4% margin of error with a 95% confidence level. Survey #2 polled 313 Manta members and has a +/- 5.5% margin of error with a confidence level of 95%.