Interestingly a majority of strategies deployed by most businesses are geared towards acquiring new customers with less focus on retaining acquired customers. Some businesses lose clients as much as they are acquiring new clients. Their sales funnel can be likened to a basket that no matter how much water is poured into it, it’ll always be empty.
Here are 4 key reasons why customer retention is a very important objective for any business.
1. Save Money On Marketing
It costs significantly more to acquire a new customer than it does to retain an existing one. For new clients, you have to deploy a barrage of marketing campaigns whilst spending more money trying to reach them to convince them to patronize your business. If you do not retain them once you acquire them, it means you need to always spend money on marketing to stay afloat. So to save your money and reduce your marketing expenses it is important you deploy efforts to keep your old customers who are already familiar with your products and services.
2. Get more Repeat Purchases from Customers.
Loyal customers will use your business regularly for purchases and tend to spend more money. Existing customers are 3 to 10x more likely to buy than a cold lead. A valued customer trusts your business and believes that you offer a superior service compared to competitors.
3. Free Word-Of-Mouth Advertising
Repeat customers are more likely to tell their friends and family about your business and its products, and customers respect the opinion of those close to them. Customers are happy to tell people about the excellent service they received or a product that they enjoyed. A successfully retained customer is much more likely to refer to other customers. These referees cost less to acquire and have a higher lifetime value than customers gained from other ways.
4. Retained Customers Will Provide Valuable Feedback
Customers that you retain provide valuable feedback. 97% of consumers said they are somewhat likely to become more loyal to a company that implements their feedback, while 55% of consumers said they are not likely to continue being a customer of a company that ignores their feedback.
Customers who make frequent purchases from your business will know which areas of your business could be improved.
LEVERAGING CUSTOMER LOYALTY
There is significant potential for expansion and revenue growth in cultivating consistent client-satisfaction that will build a level of customer loyalty that can translate to third-party promotion for your business. These redirects focus from only pursuing client acquisition to ensuring that you have in place the right client retention strategies.
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