At almost every organization where I have worked, whether leading sales or both sales and marketing, the goal has always been attracting new customers. Obviously, securing additional business is imperative for growth. However, many companies miss the importance of keeping their customers once they have them. Or they wait until it's too late to pay attention to them. ALL HANDS-ON DECK – THE CLIENT IS CANCELLING!
Sound familiar? Panic mode takes over. And that’s because businesses think their marketing dollars are better spent only on acquisition rather than retention. Organizations believe their customer care team alone is enough to satisfy their buyers. The reality is that every employee (especially the executive team) should recognize the value of clients and work to keep them. Acquiring a new customer can cost five times more than retaining an existing one. And increasing customer retention by just 5% can increase profits from 25-95%. So, the bottom-line is don't take your customer for granted.
Higher Conversion Rates: According to Invesp, the probability of selling to an existing customer is 60-70%, while selling to a new prospect is only 5-20%. Existing customers are 50% more likely to try new products and spend 31% more when compared to new customers. Existing customers are already familiar with your products or services. Marketing to them yields higher conversion rates as they are familiar with your brand, making them more likely to make repeat purchases.
Increased Customer Lifetime Value (CLV): A study by Bain & Company found that increasing customer retention rates by just 5% can increase profits by 25-95%. Additionally, the CLV of a retained customer is significantly higher. Retained customers contribute more to your bottom line over time. By investing in marketing efforts targeted at existing customers, you secure current revenue and enhance the lifetime value of the relationship.
Brand Loyalty and Advocacy: According to a survey by HubSpot, 55% of consumers would recommend a company to others after having a positive experience with their customer service. Consistent marketing to existing customers builds brand loyalty. Satisfied customers are likelier to become brand advocates, spreading positive word-of-mouth and attracting new customers through their recommendations. At Tangelo Media, we can substantiate this. The majority of our new clients come from recommendations because we treat every customer like they are our only customer.
Understanding Customer Preferences: Accenture's Global Pulse Survey revealed that 91% of consumers are likelier to shop with brands that provide relevant offers and recommendations. Marketing to your customers lets you gather valuable data on their preferences and behavior. This information enables you to tailor your product and service strategies, providing personalized experiences that resonate with your audience. It also allows you to build new offerings that are actually in demand.
So, now you know why you should prioritize your current clients, but do you know how?
Exceptional Customer Service: This is an obvious one but according to the Zendesk Customer Experience Trends Report, 75% of customers are willing to spend more with companies that provide exceptional customer service. According to Qualtrics, 80% of customers have switches brands because of a poor customer service experience. Outstanding customer service is a cornerstone of retention. Prompt responses, efficient issue resolution, and a customer-centric approach contribute to building lasting relationships. Consider solving some customer challenges with a real live person instead of relying too much on AI. Companies save a lot using automated systems, but how much do they lose? In fact, 74% of consumers said they are more loyal to a business that allows them to speak to a human, than those that only support customer service through digital or self-service channels.
Keep the Salesperson Involved: In many organizations, once the sale is complete, the client is passed on to another team, only to hear from the original contact if they are trying to sell something else. However, the foundational relationship was built between sales and the customer. The client probably bought the product or service because of the bond they had developed. So, why would you take that for granted? After all, the salesperson has skin in the game because they often don't get paid if the client cancels or doesn't fulfill the terms of their contract. Consider pairing the salesperson with a customer service rep so they can work as a team to ensure their customers are treated right.
Customer Loyalty Programs: Loyalty programs are a powerful tool for retaining customers. Offering rewards, discounts, or exclusive access to loyal customers encourages repeat business and creates a sense of belonging and appreciation. But make it worthwhile. Sometimes, loyalty programs can feel like a con job. Just spend twenty dollars more, and you get free shipping. A loyal customer should always get free shipping. What about trying some offers where there is no catch? Talk about a way to secure loyalty.
Proactive Communication: A study by Salesforce found that 67% of customers say their standards for good experiences are higher than ever. Regular and proactive communication helps keep customers informed and engaged. Whether through newsletters, personalized emails, or social media updates, staying connected builds a sense of transparency and trust. If you are a B2B organization, why not have each of your top executives be responsible for regular communication with some of your most trusted clients? That not only makes the customer feel important, but it also gives executives first-hand insight into client expectations.
Surveys and Feedback: According to another study by Qualtrics, 80% of customers are more likely to be loyal to a brand that seeks their feedback. Actively seeking customer feedback demonstrates a commitment to improvement. That said, you can't ignore the feedback once you get it. That is even worse than not asking in the first place.
Summary:
It can never be customer retention versus customer acquisition. Acquiring new customers is non-negotiable but you cannot afford to take your loyal clients for granted either. Buyers have many choices, and products and services are often not that unique. However, the differentiator can be the experience. Catering to your customer's needs is a strategic imperative for building brand loyalty, increasing conversion rates, maximizing customer lifetime value, and harnessing the power of satisfied customers as brand advocates.
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