The vast majority of businesses focus on customer acquisition, and only a few focus on retaining previous customers.
But did you know your business experiences a higher rate of return from its repeat customers?
It is much cheaper, more efficient, and more convenient for a business to retain its customers than to acquire new ones.
This is exactly why your business should place more emphasis on retention marketing.
But what exactly is retention marketing? That is what we are going to learn as we also see why it’s a must for your business.
Retention marketing involves marketing efforts geared towards maintaining current customers.
Keep in mind that customers are more likely to come back and purchase from your business when they have a great experience.
And granted, this is not to say customer acquisition should not be given its priority.
However, the key to growth for any business is retaining and expanding its customer base.
Why Retention Is Important
Alright, the concept sound fair enough – Retaining existing customers, rather than relying completely on new leads.
But why is that important, really and how can it be of your benefit?
Let’s find out!
1. It’s Cheaper!
It is much more expensive to acquire new customers for a business than it is to retain old ones.
When it comes to customer acquisition, a lot of resources need to go into planning and research as well as creating marketing campaigns.
With customer retention, a business doesn’t have to worry about these.
However, one thing to keep in mind is that customer retention will still require its fair share of effort.
2. More Profit
Repeat customers bring in more revenue to the business compared to new customers.
Therefore, it is important that you don’t take your repeat customers for granted.
If you were to lose those loyal customers, for instance, your business would go down some good % in revenue.
And do not forget the customers you lose are also likely to share their sentiment with other potential customers.
3. Brand Recognition
Customers are bombarded with thousands of advertisements every single day. But if you were to ask a customer where they purchase their products from, they are likely to name just one or two brands.
This just goes to show that customers are able to block out the majority of advertisements and focus on their favorite brands.
Customers remember brands with which they have an emotional connection.
Therefore your business should engage your customers and make them feel valued.
This helps keep your brand at the top of their mind for the next time they want to make a purchase.
4. Referral Business
The best part about improving your customer service is that customers are likely to share their experiences with other (potential) customers.
You encourage customers to do the marketing for you, and this can be more effective than other marketing strategies.
It is also a great way to manage your budget as your business doesn’t have to spend much on advertisements.
5. Response To Marketing
Old customers are more responsive to your marketing efforts than new customers.
The latter are more likely to ignore your message as they are unfamiliar with your brand.
This means you get a higher ROI on your marketing campaigns with your repeat customers than your new customers.
Customer retention is a long-term strategy that focuses on growing a business for the future.
To grow your customer base will mean having a good customer acquisition strategy.
However, having an equally good customer retention strategy will help maintain your customer base.
So hey, marketer, don’t forget this important aspect!