What is the most valuable business marketing approach, customer retention or customer acquisition? The advent of relevantly inexpensive, multichannel, digital communications has many questioning the preference for retentive marketing over the acquisition of new customers. However, a strategy overly weighted to acquisition over retention is leaving many brands unable to grow new client acquisitions in large enough quantities to overcome the business lost to existing customers.
Research performed by Frederick Reichheld of Bain & Company indicates that the cost of acquiring new customers over retaining existing customers is five times more costly. Data provided by marketing metrics show that it’s 50% easier to sell existing customers than new customers, and the likelihood of upselling a new customer is 14 times higher than closing a potential new customer. Clearly, spending too much time attempting to attract and add new customers fails to recognize a business’s greatest asset, existing loyal clients.
Building a sustained group of loyal customers requires a long-term commitment to a personal, authentic, and individualized approach which requires a marketer to know and understand targeted customers’ needs and wants. Begin by listening to your audience and analyzing customer data that reveals important information about behaviors, interests, and preferences.
Re-engage existing customers by creating content that not only highlights the value of your products or services but provides relative information about things happening in the business and in the industry. Loyal customers favor being part of something positive and successful. Storytelling, through content media, about employees’ community service activities or celebrating the organization’s community outreach programs may seem unrelated to making the next sale, but shared values between the business and its customers are a growing feature of successful companies.
Roughly 76% of consumers report growing frustrated with a brand when personal experiences aren’t unique enough. Today, consumers don’t want to feel as though they’re just another transaction and expect personalization from the brands they do business with. Doing what the competition cannot do or is unwilling to do will have the most valuable customers driving back for repeat business. Focus on differentiating the brand from the competition and develop marketing campaigns that build a personal relationship with the most valued customer.
Successful communication begins with listening and ends with inviting a listener’s feedback. Design digital social media conversations and campaigns that give the targeted consumer a chance to voice opinions through online communities and surveys. Act on the concerns expressed and respond to all inquiries promptly and responsibly.
Relationship marketing requires a broader, longer-term set of goals that focus on branding, social interactions, greater patience, and more intense organizational efforts. But committing to building on those aspects of a business relationship that occur after the first sale will over time result in greater market penetration, customer loyalty, and profitability.