Customer acquisition vs. retention -- Are you investing in the right place?
For many business owners, marketing means reaching out to a new customer base – people who have never stopped by or have never purchased your product and service. While you do need to court these prospects, it is easy to overlook the abundant opportunity offered by the customers you already have.
When you shift your focus to retention and keeping existing customers happy, you also provide your brand with a unique marketing opportunity, one that offers both low costs and high ROI. Here are three reasons to invest in customer retention.
1. Satisfied customers are easy to upsell to
Of all the prospects you have on your list, people who have already bought from you are the easiest to sell to. Whether they’ve already stopped by and purchased a meal, selected a new gadget or toy or hired you to complete a project, if they’re pleased, you’ve already gained trust and made a great impression.
When you pay attention to your existing customer base, they are reminded of that wonderful experience – and may come back to you for more. Simply reaching out and engaging via social media, email or another route ensures they know you care beyond that initial sale and that you are still around. Make it a point to cultivate these relationships and you’ll have customers for a lifetime, not just for a single sale. According to the Harvard Business Review, adding retention marketing to your strategy can result in a substantial increase in profits -- up to 95% more in some cases.
2. Selling to existing customers costs less
You'll spend less on marketing when you direct your efforts at people who have already purchased from you -- a lot less. According to marketing experts at Huify, you'll spend about five times more to acquire a new customer than you do to sell to an existing one. Targeting existing customers can help stretch your marketing budget and boost your revenues throughout the year.
Since those existing buyers are already aware of your brand, know what to expect and have a connection with you, much of the work is already done. Put a tempting deal in front of them via email or other low cost method and you'll see a fresh run of orders or sales without incurring a large cost.
3. Existing customers can become brand ambassadors
Every time your happy customers recommend you, share a purchase or give a gift from your store, they are offering a personal recommendation for your brand. This loyalty and the resulting boost in awareness only happen with existing customers – those who are just learning about your brand or trying you for the first time are not yet ready to recommend you to others.
Engaging with existing buyers, offering support on their purchases, checking in with them and simply maintaining an active and visible presence allows you to take advantage of their connections and creates a strong and lasting stream of business for your brand.
Thinking about customer retention and incorporating your existing or past buyers into your marketing strategy can help increase your overall revenues, improve your bottom line and allow you to get the best possible ROI for your brand. The efforts you make to stay connected will pay off again and again over time.