In terms of maintaining a successful brand, healthy relationships, mainly with your current customers, are the essential element. A robust customer retention rate can lead to improved customer advocacy and loyalty, aiding with higher revenue for your business. Today, we will show you why customer retention is important for business!
There are several brands that are not taking full advantage of thorough and effective customer retention management through these significant benefits. They can even focus a lot more on customer acquisition to the detriment of their core customer base. We will be exploring the complete value of a customer retention program and the way it becomes vital to the new initiatives of the customer.
Balancing Customer Acquisition and Customer Retention
According to recent studies, it has been seen that there is a vast majority of brands are continuing to place a great deal of emphasis on attracting new leads than on engaging with and retaining the current customers. About 72 percent of the small businesses are now intended on using the major part of their marketing strategies and budget for the acquisition of new customers.
It mainly ignored one of your brand’s more powerful assets being your satisfied customers, considering the issues with this approach. The aim is for the acquisition to be less cost-effective for your business at the same time. It can even be costing you seven times more to secure a sale from a new customer that is not keeping up with the existing ones who are engaged.
The potential customers being at the top of your sales funnel and just at the beginning of their buyer’s journey is part of the reason for these discrepancies. These are the visitors who are still exploring and discovering their options, and there is also a greater distance in terms of the final purchase at this early stage. It would mean that there is a much higher barrier to entry for these people compared to your current customers.
The following are the main reasons that customer retention management is quite vital for your business:
Repeat Customers Mean More Purchases
New leads would need several visits and interactions with your brand for making a purchase. But the continuous visits from the existing customers will be generating more revenue. About 40% of the revenue from the eCommerce store is being contributed to just 8% of the customer, and the same goes true with the physical stores.
Repeat Customers Sell Your Brand
Loyal customers can be more compelling in terms of forcing than even the best marketing campaigns when it comes to attracting new customers. You should be the satisfied buyer who can become an enthusiastic advocate for your brand and your product as they are sharing their experience with their family and friends online and in person.
Repeat Customers Provide Market Insights
On the audience group that you are targeting, your best customers can also be the best source of information since they are confirmed purchasers of your product and services. You get a better understanding of why and how the leads become customers allowing you to refine your marketing and targeting efforts through the shopping and purchase patterns.
The existing customers can also offer their insights that might be a mission from your current lineup all at the same time. Your profit can significantly increase by up to 40% making it easier to repeat your customers than the new ones. You can make the most of these opportunities by improving your product recommendations and collecting regular feedback from loyal customers.