"If they don’t buy again, you’re dead" – Shark Tank star Kevin O'Leary explains why repeat customers are vital for small business survival

Shark Tank investor Kevin O’Leary uploaded a video on Instagram on June 1, 2025, explaining the concept of customer retention and its importance in a growing business. The clip, taken from one of his recent TV interviews, saw Kevin note that the first few customers buy a product from a new company only if they think it is good for them. He said that they don't buy the product because of the brand of the company.

However, the Shark Tank star emphasized that if these customers didn't come back for the product again, the newly started company would eventually die. To address this challenge, he recommended tracking key metrics like Attrition, Customer Acquisition Cost (CAC), and Return on Ad Spend (ROAS).

"Getting your first 100 customers is just the start. If they don’t buy again, you’re dead. Attrition, CAC, and ROAS — that’s the holy trinity you better understand if you want to survive," he wrote in the caption of the post.

He explained that these indicators help businesses measure retention, understand customer behavior, and make smarter growth decisions.

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Shark Tank investor Kevin O’Leary explains the concept of customer retention and its metrics

In his latest Instagram video, Kevin O’Leary pointed out that the first few customers of a new company buy a product based on its quality and value. He said that they don't buy because of the brand name, noting that it was a very important distinction.

At this early stage, customer retention is crucial, as losing too many initial customers could ultimately cause the business to fail. To tackle this issue, the Shark Tank star suggested using several customer retention metrics to help track and plan the incoming customer flow in the company.

One metric he highlighted was "attrition," which was the number of people who leave or stop buying from a particular company. The investor noted that once a new company gets past its first hundred customers, it should find its attrition rate.

He noted that moving forward, the company should plan its strategy considering that its attrition rate is always as low as possible.

"How many people buy the product and never buy the good or service again? Then you're spending all your energy trying to acquire that customer once, and then you have nothing else to sell them after the fact. That's a tough business model," he added.

The Shark Tank investor added that attrition was something "the telco companies look at," as they "really don't want to get past 2.5% attrition."

"People buying their service and then switching to another provider, that's about 2.5% grind, and that's expensive," the Shark explained.

Besides attrition, Kevin said that he also considers other metrics/concepts like Customer Acquisition Cost (CAC), and Return On Ad Spend (ROAS). He emphasized that these three concepts were some of the best ways to analyze any business that was around a million in sales.

Building and maintaining trust with customers also helps in improving customer retention in a business. Kevin discussed it in a YouTube short posted on his channel on December 15, 2024. The Shark Tank star believes that trust is fundamental to business success, and open communication with customers and employees can help foster such trust.

To make this communication more accessible, the Shark shared that he gives his direct number to his customers and employees to strengthen trust and invite important feedback.

“The more people I give this number to, the less it rings. But when it rings, it’s a big deal,” he said.

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Shark Tank season 16 episodes are available on Hulu and ABC.