Calculate a customer's value

Customer relationships are among your company's most valuable assets. Determine the value of retaining them by calculating an individual patron's Customer Lifetime Value (LTV), which will tell you the amount of profit an individual customer can create for your business.

I recommend: See How to Compute Your Customer Lifetime Value or automate the task by downloading a special LTV spreadsheet file for Microsoft Excel from the Database Marketing Institute.

Create connections

The No. 1 reason that businesses lose customers is that they lack contact with them. Touch your customers often with media and marketing messages that say, "You matter.”

I recommend: E-newsletters — featuring everything from coupons and product offers to useful news and how-tos — are a great way to maintain frequent and meaningful contact with your customers. Build your own e-newsletters at eNewsletters Online or Constant Contact.

Deliver a positive customer experience

Customer retention is easy when people like to do business with you. Put cleanliness, courtesy and customer service at the core of your business to make it as pleasant as possible for customers and clients.

I recommend: Does your customer experience need work? Making changes can easily impact profits; find out how with Harris Interactive's Profitability Simulator, which shows how simple changes in facilities, services and prices can affect your bottom line.

Manage your customer relationships

Practicing customer relationship management (CRM) is a great way to formalize a customer retention effort. While CRM is common with big companies, more and more small businesses are adopting the same strategies.

I recommend: Sites like CRMBuyer.com and SearchCRM.com post articles and guidance on the cost of Web-based CRM solutions versus the installed versions. For useful information on personalization, go to CRMProject.com. And to find out which companies are expanding their hosted offerings, check out DestinationCRM.com.

Hire help

Customer retention should be a top priority for every business. It takes time and energy, though, to truly track your customers' tastes. Consider hiring professionals to create a customer retention strategy for your business; the returns will be worth the investment.

I recommend: If you're ready to invest in a customer retention expert, try Integrity For You, which helps its clients craft fully operational retention programs for their business.

Measure ROI

Retention leads to revenue. Monitor your retention efforts closely to make sure they're working hard for your bottom line.

I recommend: Customer relationship management (CRM) software can help you maintain — and measure — relationships with current customers. Microsoft Dynamics CRM 3.0 includes tools for tracking responses to your retention efforts, as well as financial results.