If you want to make more money in your business, you need to balance energy spent on acquiring new customers versus retaining existing customers. Often, retention gets lost in the flurry of trying to get new customers. Don’t make that mistake! You can boost your bottom line by retaining the customers you already have.
You know the importance of acquiring new customers. They are a business’s lifeblood. New customers are the driving force to stability and growth. If you’re like most business owners, you’ll do almost anything to get them. They are the focus of your advertising budget and the key measure of your sales strategy.
And what happens after you have fought to acquire a new customer? If your business is like many others, you ignore them! If you focus too strongly on the new customers, the old ones will slip out the back door.
That’s not something you can afford. Retention of your existing customer base is almost as important as acquiring new. If you invest in keeping your existing customers happy with your services, and keep their interests at heart, they will be unlikely to seek greener pastures. According to Laura Lake on About.com Guide, a regular customer who comes to you again and again spends 33% more than a new customer, and is twice as likely to refer you to a friend!
It is essential that you balance your attention between new and existing customers. Here are some tips for retaining your existing customers.
1. Get Personal
Nothing works better at reassuring your loyal customers than the personal touch. Remind them that your business, like theirs, is made up of humans and they will be less likely to explore alternative suppliers/providers. And remember that the spoken word is more powerful than any written material — so phone your best customers whenever there’s an opportunity.
2. Reward Loyalty
Be creative at thinking of ways to provide regular customers with advantages for staying with you. Offer coupons or discount codes targeted precisely at your loyal customers. Give incentives to encourage recurring orders. You might be surprised by the results if you invest a little more of your marketing/promotional budget in customer retention and less in new customer acquisition.
3. Stay In Touch
No doubt you use newsletters and email blasts to maintain contact with your carefully-developed, opt-in email list. How about identifying current (and previous) customers on that list and sending them alternative messages — reasons to stay with your enterprise, reasons to come back?
Your customers, like you, see a lot of marketing material come across their screens. Try to make yours stand out. And find out the best ways to use social media and web marketing for your business.
4. Watch for Customer Attrition
Try to detect when an existing customer has gone elsewhere or otherwise lost interest in your business. You could, for instance, make use of the results of your latest email campaign. Just run a comparison to identify which of your customers bought in the past 6 months and yet failed to open at least one of your last three newsletters. See if you can identify regular customers whose recent orders have declined or vanished. Look for warning signs of customer attrition. And then, take immediate action to shore up the relationship.
Remember, selling something to a prospect costs six times more than selling the same item to an existing customer (About.com)! Focus on both retention and acquisition in your marketing mix.