For small business owners with limited marketing dollars, it’s a common conundrum: Should you focus your marketing budget on generating new customers, or should you focus your time and efforts into cultivating repeat customers? Which is going to have a stronger impact on the bottom line?

It’s easy to get caught up in the feeling that you already have a strong base of loyal customers and therefore the best bet is to put all of the company’s marketing energy into seeking out and attracting new customers. However, more often than not, the math will prove otherwise. The cost of acquiring new customers is almost always higher than the cost of creating long-term loyalty among your existing customers.

Another factor you’ll want to consider: If one of your competitors finds a way to show customers how much they’re appreciated, it could create an opportunity for that business to move in on your revenue if they beat you to the punch.

The truth of the matter is that it simply costs less to sell more frequently to customers you’ve already acquired. Not to say that you should completely abandon all attempts to attract new customers, but if your top priority is to generate repeat business, here are a few key tips to keep in mind:

Stay social. Utilize social media sites like Facebook and Twitter to let people know about the daily specials, exclusive deals or new offerings. Pay attention to customer feedback and search your business’s name to see what people might be saying. Don’t ignore or remove negative comments, but instead use them to learn what you could do better and show your customers that their opinions and experiences matter to you.

Get personal. If you’re operating a small business, use people to your advantage—meaning, really get to know your best customers and train your employees to treat those customers like family. Try to greet them by name and anticipate what they will need when they walk through your doors. Genuine, personal service is one of the easiest way to create lasting loyalty.

Give rewards. The icing on the cake is an exciting rewards program. Once a customer joins a loyalty program, they are 70% more likely to make a repeat visit, and they’re far more likely to recommend your business to friends. Get to know what your customers want and what will bring them back. Ideally, it’s best to have a reward available by the time a customer registers a third visit (a free item of nominal value will suffice). At the fourth, fifth or sixth visit, you’ll want to up the ante to a buy one get one free on a full price item or a bonus item when a certain purchase amount is met. Just be sure it’s an offer that feels like a reward, not an afterthought.

Often small business owners fear trying something new and loyalty programs are no exception. Based on anxiety and worry, you’ll often justify not doing something with excuses like “it’ll be too expensive,” or “it won’t drive sales enough.” But the simple truth remains, it always pays to build a strong repeat customer base, regardless of the industry you’re in. WF

Lance Brown, vice president of product development for Huzzah Media (, oversees the development and strategy for Huzzah Media. He began his career in sales & marketing for large retail brands before transitioning to positions on the small business side. Brown took his retail expertise and helped smaller boutique software companies develop CRM-based applications that focused on helping SMBs better understand how to be more efficient with their sales & marketing initiatives.

Published in WholeFoods Magazine, January 2015