It's Cheaper to Keep a Customer Than Find a New One (And How to Actually Do It)

"It's cheaper to maintain a customer than it is to find a new one."

Geoff Farinha said this like it was obvious. And it is—everyone knows this is true. But knowing it and actually building your business around it are two different things.

USI HVAC operates in what Geoff calls "a very small and incestuous industry" in Boston. Everyone knows everyone. That dynamic creates an interesting reality: your reputation follows you, and your relationships are assets that move around.

"We get brought into new buildings because a facility manager will leave his current company, go to a new building and bring us along with him. We also lose properties because of that same thing happening in reverse to us as well."

Your customer isn't just the building. It's the person. And the person moves.

The Relationship Asset

Think about what this means economically.

If you do great work for a facility manager at Building A, and that person leaves and takes a job at Building B, you didn't just retain a customer—you gained one. The relationship traveled with them.

But if you did mediocre work, or worse, if you damaged the relationship? Now they're at Building B calling your competitor. And they might be telling Building B's network about their experience with you.

In a small industry where everyone knows everyone, your reputation compounds. Good relationships multiply. Bad ones spread.

This is why Geoff's team focuses on servant leadership with their technicians. Those technicians interact with facility managers every day. Every service call is a moment where you're either strengthening the relationship or weakening it.

The Annual Review

Here's something tactical that USI does: when they do annual reviews with clients, they show them where their equipment stands age-wise so the client can plan from a budgeting standpoint.

"Right now we do that, but it's entirely manual. I have to do that stuff myself," Geoff mentioned.

This is the kind of thing that seems like extra work but is actually relationship maintenance. You're not just fixing things when they break. You're helping the client understand their situation, plan for the future, and make informed decisions.

That's a different relationship than "we show up when you call us." That's partnership.

And when a partnership like that exists, the client doesn't shop around. Why would they? You're not just a vendor—you're the person who knows their building, knows their equipment, and helps them look good to their bosses by planning ahead instead of reacting to emergencies.

The Maintenance Contract Connection

In a previous article, I wrote about how Geoff thinks of maintenance contracts as "the annuity for the business"—and how USI doesn't necessarily try to make money on them directly.

This connects directly to customer retention. The maintenance contract isn't just recurring revenue. It's recurring contact.

Every visit to change filters and tune equipment is a touchpoint. It's a chance to see the facility manager, hear about their concerns, notice equipment that's showing wear. It's relationship maintenance disguised as equipment maintenance.

The companies that only show up when something's broken are always starting from scratch. The companies that show up regularly have an ongoing conversation.

What This Looks Like in Practice

From everything Geoff described, USI's customer retention approach comes down to:

Be present. Not just when there's a crisis. Regularly. Through maintenance visits, annual reviews, and proactive communication.

Deliver value beyond the invoice. The equipment reports, the budget planning help, the heads-up that something's about to fail—these don't cost much to provide, but they create massive differentiation.

Invest in the people who touch customers. Your technicians are your front line. If they treat customers well, the relationship strengthens. If they don't, no amount of sales effort can fix it.

Remember that people move. The facility manager you're serving today might be somewhere else tomorrow. The relationship you build follows them—good or bad.

Don't take relationships for granted. The flip side of gaining customers through relationships is losing them the same way. Complacency kills.

The Industries Where This Is True

I've been thinking about how universal this is across the businesses I've researched.

Any industry where:

Customers have ongoing needs (not one-time purchases)
There's a limited pool of buyers who know each other
Decisions are made by individuals, not just committees
Reputation spreads through word of mouth

In those industries, customer retention isn't just a nice-to-have. It's the whole game.

New customer acquisition is expensive and uncertain. You're competing against everyone else who wants that customer. You have no relationship equity built up. Every new customer is a gamble.

Existing customers? You've already won them. You know them. They know you. The barrier to keeping them is so much lower than the barrier to getting them in the first place.

And yet most businesses spend more energy on acquisition than retention. They chase new logos instead of deepening existing relationships. It's backwards.

The Long Game

My dad lost his renovation business when I was a kid. I don't know all the details of what went wrong, but I've often wondered how much of it came down to not having a stable base of recurring relationships.

Renovation is project-based by nature. You finish a job, you move on. There's no maintenance contract, no annual review, no ongoing touchpoint. Every job is a new sale.

That's a hard way to build a business. You're always hunting. One slow quarter and you're in trouble.

The businesses that survive long-term usually have some version of what USI has: a base of relationships that persist year over year. Not just customers—relationships. People who know you, trust you, and come back.

It's cheaper to keep a customer than find a new one. Everyone knows this. The question is whether you've built your business around it.