Is your company more focused on acquiring new customers or nurturing existing ones?
Though 63% of marketers consider customer acquisition to be the most important advertising goal, successful companies know that engaging their loyal customers is critical to their bottom line.
Recently, FiveStars performed an analysis of 14 million store visits from more than 1 million customers, as well as the results of loyalty programs from over 2,000 businesses. The study found that loyal customers (those who visited stores at least 10 times) account for about 20% of the company's customers.
Businesses, however, shouldn't scoff at the deceptively low percentage. That 20% drives 80% of your business's total revenue and 72% of total visits to your business.
According to FiveStars, "depending on the vertical, loyal customers can account for up to 84% of total visits." Best of all, loyal customers spend 10 times more than new ones.
Other reasons for focusing on loyal customers:
- VIP and loyalty program members are 70% more likely to spread the word about your business.
- 65% want stores they want to frequent to email them coupons and promotions.
- The probability of making an additional sale or upselling to loyal customers is 60-70%.
Compared with loyal customers, new ones are more price-conscious. The chances of getting a sale from a new person is 5 to 20%. And actual sales from promotions sent to them is less than 1%.
For more about the importance of loyal customers, comparisons with new customers, and three reasons why a loyalty program should be part of your business, check out the following infographic by FiveStars.
