Customer Acquisition and Retention Strategy
Ignore Existing Customers at Your Own Peril
Why Your Business Needs a Customer Acquisition AND Retention Strategy
I have long argued that customer retention is just as important – if not more important–than customer acquisition.
While every business needs new customers to grow, the most reliable source of new revenue comes from the customers who already know and value your products.
So why do so many business owners focus more on getting new customers than on keeping the ones they have?
Most companies don’t seem to value their relationships with existing customers:
• 30% of companies say they are “very committed” to relationship marketing
(keeping current customers happy)
• 46% say they are committed “to a certain extent”
• 22% say they don’t do any relationship marketing
One reason is that it’s common to think that if you have a great product or service, customer retention will happen naturally. While this might be the case in certain instances, sooner or later your customers will start to notice that you don’t care about them. If you don’t work continuously to earn their loyalty, eventually, they will leave.
Customer Retention More Cost Effective than New Customer Acquisition
Customer retention is not only cheaper than customer acquisition, but it can deliver a higher return on investment (ROI). Research shows that 49% of companies say that, pound for pound, they achieve better ROI by investing in relationship marketing over customer acquisition marketing.
Are you and your team allocating the bulk of your time, energy and budget to bringing new customers on board – even when you know costs will be higher and ROI lower?
If so, here are some thoughts to ponder:
• Where would you rather spend your money: on customer retention or acquisition?
• What are you doing to retain your existing clients and customers?
• How do you convert your existing clients and customers into raving fans of your business?
• When do you ask your raving fans for referrals?
Remember the lyrics to that that old scouting song, “Make new friends, but keep the old”? It’s great advice for growing your business, too.