It costs five times more to acquire a new customer than to retain a current customer. Yes, signing up new clients is exhilarating and justifies the money, effort, and time spent crafting sales strategies and engaging marketing campaigns. However, the key to sustainable business is nurturing relationships with the quality customers you have. In this post, I will discuss why customer retention is just as important, (if not more depending on the market,) as gaining new business.
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Most business owners have heard of the Pareto Principle (or the 80/20 rule). For many events, roughly 80% of the effects will come from 20% of the causes. This is frequently the case with your customers/clients too. 80% of your company’s future revenue will come from just 20% of your existing customers.
Additionally, the payoff for treating your best buyers like VIPs will likely result in a 60-70% success rate of selling to them again. If you are strapped for time, making sure your current customers are happy is a worthwhile priority.
There is no better advertisement than the endorsement of a satisfied customer. In fact, the reputation earned by client reviews and testimonials can, literally, make or break a business. Your existing customer base is an endless supply of new (free) leads, so make sure your unofficial brand ambassadors are always singing your praises! If you have some customers who might be willing to write you a review, we already wrote an email template you can use to reach out to them.
It’s time-consuming to break down sales barriers with new buyers. Current clients trust you, so overcoming objections takes less effort. And since existing customers already find your products and services valuable and the buying experience pleasant – you just have to continue fulfilling your promises and delivering a consistent level of service to keep them coming back.
Existing customers are already aware of your company, interested in your products, and willing to buy them – no targeting required! This reduction in ad spend leaves money to invest in retaining the customers you have. By offering promotions like birthday deals, or celebrating the anniversary of their first purchase, you’re cementing their allegiance and keeping your company top of mind for future purchases.
Caring for the customers you have is the best way to acquire new ones. By understanding who your clients are, and what makes them stick around, you’re drilling down on the attributes of future buyers. Your current customers are the roadmap to where your prospects are found, their purchasing motivation, and the messaging that resonates.
Working to retain clients also makes them less likely to shop your competitors. The key to keeping your customers is keeping them satisfied with communication (especially in uncertain times), promotions, and deals. Customers talk, make sure they have something great to say about your business.
We’d love to help you create a marketing plan for your customer success strategy. Contact us if you think you could use a little help.