Getting new clients is always an exciting prospect because it means growth. However, too many business owners prioritize gaining new business and forget to take adequate care of their existing clients. Not only can acquiring new customers cost six to seven times more than retaining an existing customer, but existing – and satisfied – customers are significantly more likely to spend more on your products or services. Still, nearly half of all companies focus more on new customer acquisition than customer retention.
What explains this cost discrepancy? Consider the following:
- There is about a 60 to 70 percent chance of selling to an existing client, and only a five to 20 percent chance of selling to a new client
- Existing clients often spend more than 30 percent more with companies than new clients, and they are about 50 percent more likely to give a new product or service a try
- The most popular acquisition methods can be expensive and can include paid search results, online display advertising, and hiring SEO specialists
- On the other hand, the most effective client retention methods are email marketing and social media marketing, which can cost next to nothing
The truth of the matter is your company can still grow by tending to existing customers who will then spend more and order new products, in addition to marketing to new customers. In fact, research shows the primary factor for revenue growth was customer retention, followed by customer acquisition, product innovations, and marketing strategies.
So How Do You Retain Existing Clients?
First, never think that just because your product or service is great, customers will automatically stick with you. This is not always the case, and this is a short-term point of view. You need a long-term customer retention strategy in place that helps keep them happy and loyal to your company.
In order to design a strategy, you should first understand the reasons customers leave:
- The client thinks your company doesn’t care about them
- Dissatisfaction with a product or service
- A competitor lures a client away
- The client has a friend or family member who will provide the same service
- The client has no need for the market any longer
- The client passes away
Overwhelmingly, believing that you don’t care is the number one reason a client stops giving you money. This shows you can never stop giving your clients attention, even if they’ve been with you for years.
The following are only five examples of customer retention strategies that can help you increase your bottom line:
- Pay attention to your VIP customers and follow up if they haven’t made recent purchases
- Tailor special offers to certain customers
- Give incentives or rewards to the most profitable clients
- Personalize your communications and follow-ups
- Schedule time to follow-up and reach out to clients
Taking care of existing clients is not only the right thing to do but it also profitable for your organization…everyone wins.