You’ve likely heard the stats before. But it’s worth reminding you. Acquiring a new customer can cost up to five times more than retaining an existing one.
Add to this that the probability of selling to an existing customer is at least 40 per cent more likely than to a brand new customer.
And (yes, there’s more), your existing customer base spends 31 per cent more than new customers. So even when you release a new product, your loyal customers are 50 per cent more likely to buy into it.
We’d say it’s pretty clear that keeping customers happy pays off.
But with many marketers, tech, and agencies so excited about the top of the funnel, it’s easy for your current customers to be overlooked.
Many believe that once they’ve bagged the customer, their work is done, while others assume their customers are happy, and need little attention.
And if your brand can’t deliver, your customers can easily find someone else to shop with.
In this guide, Pure360 explore how email is integral to keeping your customers happy and spending, from simply welcoming new customers on board, to encouraging them to buy more.
When it comes to customer retention… Better starts here.
Why customer retention is important
So we’ve established that current customers cost less and are more likely to buy. But why else should you care about customer retention?
Word of mouth
If you put effort into keeping your customers happy. Then they will put effort into letting the world know.
Word of mouth marketing such as reviews, testimonials, social media mentions, or recommendations are the ultimate social proof. And they work.
Eighty-eight per cent of people trust online reviews written by other consumers as much as they trust recommendations from personal contacts.
And 74 per cent of consumers identify word of mouth as a key influencer in their purchasing decisions.
Understanding your audience is key to growing your business. And what better source of information than those who buy from you?
Talk to your customer base. Ask them for their opinions, whether they are good or bad.
Ask them if they considered other competitors. Why they bought from you. And what they would like from you.
All this feedback is invaluable. It will help you direct your strategy and stay ahead of your competitors long term.
Customers are key to any business. But so are employees.
The pressure put on teams to constantly be plugging a leaky bucket can be exhausting. And expensive.
Ongoing cold calls and hunting for new customers can sometimes seem like slow progress. And can be demoralising.
By focusing on your current customers, your employees can have more meaningful discussions with people who are already bought into your product or service.
And instead of sell, sell, sell, your employees have the opportunity to help others, whether that be through support or recommendations. So your team is focused less on the hard sell, and more on your audience.
And of course, the costs saved in customer acquisition all go towards helping your marketing budget.
Finding and bringing on new customers is expensive for any marketing team.
Paid advertising. Events. Referral schemes. It all adds up.
And while we’re not suggesting marketing teams won’t have to consider these channels in their budget, by increasing their focus on customer retention, their outgoings certainly won’t be as high.