Out with the old in with new?
Is this the way your organization views it customer base? If it is you are most definitely missing a trick! Research shows that the probability of selling a product or service to an existing customer is between 60 – 70% where as getting a new customer to part with their cash is much lower at between 5 – 20%, depending on your business. Organizations frequently talk about the need for new customers, neglecting the customer base that they already have.
Keeping hold of existing customers is called customer retention marketing and is invaluable to a company’s success. How can your current customers help you?
So hopefully we have convinced you that the ‘out with the old and in with the new’ attitude is not a great customer strategy. Once you understand the value of current customers you’re half way there, now you just need to put it into practice. Here are some great ideas that really can help aid customer retention.
- They are cheaper! You already have their data so you can contact them for free! They already know who you are what you do so marketing efforts can be more targeted. Bringing your marketing costs down!
- Quality controllers – Your current customers know what works well within your company and what doesn’t – so listen to them and you could improve the running of your business.
- Brand advocates – in looking after your current customers you could inadvertently be bringing in new customers through recommendations.
- Engaged staff – never underestimate the power of internal marketing if you engage with your current customers your staff will follow.
- More profit – Research by John Fleming and Jim Asplund indicates that engaged customers generate 1.7 times more revenue than normal customers and engaged employees return a revenue gain of 3.4 times the norm.
- Positive experiences – Make every contact your customer has with your company a positive one e.g. automated emails, thank you messages, emails to keep them updated on their order.
- Loyalty programmes – what do your customers get for using you repeatedly? Think of how successful the Boots Advantage card has been?
- Same treatment – why should new customers get all the deals?
- Customers service – Poor customer service accounts for 70% of customer loss and is usually the deciding factor when products are similar i.e phone tariff providers.
- Communication – Everyone likes to be kept in the loop… good or bad news.
It sounds cliché but it really is the little things that make the difference. The above list is not by any means all encompassing but hopefully it has given you a few good ideas for your company.
Look after the current customers now and the new ones will follow!