Customer Retention is more important than Customer Acquisition

Customer Retention is more important than Customer Acquisition

Retaining your customers is a key aspect of your business. Without a doubt, converting leads to customers is a hard process – but your efforts can pay off if you focus on the ultimate goal – retention.

When we think about marketing, our minds often jump to lead generation tactics that attract new customers. But marketing isn’t only about bringing in new business.

If you want to build a thriving business, you need to take care of your biggest assets – Customers.

Sadly, most businesses are obsessed with lead generation – but careless when it comes to customer retention. How sad?

Considering that loyal customers will always come back for your products and services, obviously, they’re your best business asset.

Customer retention might be even more important than customer acquisition. acquisition creates a foundation of customers while your retention strategy is how you build customer relationships and maximize revenue for each one.

Let’s look at why this might be true.

What is Retention Marketing?

It focuses on bringing back customers who have already done business with a brand and keeping customers who are already connected to a brand.

The goals of retention marketing aren’t to increase the number of customers but rather to:

  • Increase customer return rates and bring past customers back into the buying cycle.
  • Decrease customer churn rates and keep existing customers in the buying cycle.
  • Drive purchase frequency and get customers to enter the buying cycle more often.

Why customer Retention is smart marketing strategy?

For new and growing brands, it makes sense to focus most of their marketing plans on customer acquisition. But once a brand has a solid customer base, they need to shift their strategy and put more attention into customer retention.

  • Increasing customer retention rates by 5% can increase profits by 25% to 95%
  • Brands have a 60% to 70% chance of selling to an existing customer versus only 5% to 20% enhances of selling to a new customer.
  • It can cost up to 5x more to acquire a new customer than to keep an existing one.
  • People who have already bought from your brand are more likely to return and spend three times more per visit.
  • When you have happy brand fans, they turn into brand advocates.

But how do you get started?

The following are some ways that you can retain past and current buyers through customer retention strategies and marketing tactics.

1.Advocacy

If you’re passionate about helping people live healthier lives, then set up an advocacy program. Your customers feel good when they can contribute to a good cause, and that bit of sunshine rubs off on your brand. 

2. Daily Deals and coupons

This strategy gives customers an incentive to shop with you again, instead of with a competitor, as they know they’ll find something at a bargain price. It creates urgency, which fuels impulse purchases, because they know the deal is temporary.

3. Exclusivity

Create an exclusive “club” or membership to make your repeat customers feel like they have access to something others don’t.

4. Loyalty Programs

Think of that punch card from your favorite coffee shop in your wallet. This helps keep the shop top of mind, giving you a nudge to visit and collect another star. There’s a rush when you get the perk, too, creating a happy customer experience all around.

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5. Email marketing

Despite the deluge of emails people face every day, they still love to hear from their favorite brands. If you use content marketing, email newsletters are an excellent channel for letting customers know you’ve published new material in your blog. And consider emailing discounts to your customers. 

6. Referral Bonuses

You see referral bonuses in both B2C and B2B customer loyalty programs. If you’ve used a grocery delivery service, for example, you might get offered $10 to refer a friend — and the friend saves money, too! Likewise, businesses can offer bonuses to customers who recommend their products or services to colleagues.

7. Personalization

Top retailers enlist personalization to provide a great shopping experience. Personalization can also be effective in B2B customer retention strategies. One example: emails that use the recipient’s name.

8. Retargeting

This digital marketing tactic brings the shopper back to complete the transaction when they might have otherwise forgotten about it. And there is no doubt that it works. 

9. Exceptional service

Exceptional service also has the power to bring customers back.  So, from the very first purchase, extend the best customer service experience you can. There are plenty of ways to do this, from personalized confirmation emails to remembering the customer’s name when they return to your shop.

Acquisition marketing is what pulls audiences into your purchase funnel and drives them to become new customers and buyers. This is an important part of marketing, but it’s just the beginning.

You also need to use retention marketing to keep customers in the buyer’s cycle and encourage them to return again and again. Focusing on the full customer lifecycle is how your brand will increase revenue while expending fewer resources, money, and time.

With well designed client retention strategies, you can understand your customer needs and improve loyalty. You have to deliver extraordinary customer service and develop interpersonal courtesy to treat customers positively.

Make your customers feel they are part of your business by taking their opinions. Implement their suggestions and acknowledge them to achieve the customer success they deserve.

What customer retention strategies do you think work best for your business? Please share it in the comment box!