Blogs and communities are always buzzing about one form of marketing or another. And if you listen closely, you'll notice that most of the marketing conversations going on—whether they're about inbound marketing, SEM, affiliates, or mobile—emphasize the importance of getting new or more customers, as opposed to keeping the ones you already have.
The same trend can be seen in the way companies reward their sales and marketing staff. Those who acquire new customers are rewarded with generous commissions and recognition, whereas the ones working to retain current customers get a lukewarm pat on the back.
Now, to be clear, there's absolutely nothing wrong customer acquisition. However, it's unfortunate that customer retention isn't getting the same (if not more) attention from marketers—because retention usually brings in more revenue, at lower cost.
New Business Is Great, but Repeat Business Is Even Better
It's time for marketers to shift their focus to customer retention and loyalty, instead of putting all their eggs in the acquisition basket. The good news: doing so may actually be easier and far less costly than you think.
Not only is it more expensive to acquire new customers than to keep existing ones (acquisition costs five times more than retention, according to Lee Resource Inc.), but current customers actually tend to spend more than new ones.
And if that weren't staggering enough for you, consider the Harvard Business School study that found "increasing customer retention rates by 5% increases profits by 25% to 95%."
Why not crunch the numbers in your own business and see for yourself just how important repeat customers are for your company? Quantify your customer acquisition spend vis-à-vis retention, and take note of the revenue that new customers bring in versus how much your existing customers are spending.
Take the first step (it's free).
You may also like:
- Personalization vs. Intrusion: How a Mix of Artificial and Human Intelligence Can Create Balance
- Niche Marketers, Is Your Customer Engagement Strategy Up-to-Date?
- Three Proven Strategies for Engaging Millennial and Gen Z Customers
- Marketing in Controversial Markets: How to Build Trust
- Keep Consumers From Cheating on You: Foster a Community to Stay Together