It’s often said that acquiring new customers is something like five times as expensive as retaining existing ones. As a result customer retention programs tend to be much more profitable than customer acquisition programs. A study by Bain and the Harvard Business School said that increasing customer retention by 5% increased profits by 25-95%.
Customer retention starts by having great products and services, and obviously marketing should have a major role in developing those. Customer retention is going to include customer service and other parts of the company, too.
And you need to market to existing customers because most won’t realize everything that your company can offer them. People see thousands of messages every day; if you’re not marketing to your customers they may not even think about you when they’re ready to make their next purchase. Vistaprint sends out promotional emails to its existing customers every day. So does 1-800-Flowers. A study by HubSpot found that emails from companies that send them out 16-30 times a month have the highest open rates – in other words, from companies that send emails every day, or at least every business day.
Out of sight is truly out of mind. Don’t assume that your existing customers are thinking about you and will contact you when they’re ready to make their next buy. Market to them.
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