Don’t take your existing clients for granted.
If you were to do a poll of all the marketing content on the Internet, you’d probably find that the vast majority focuses on acquiring new leads. There’s no surprise here. In our own discussions with our clients, we spend a lot of time talking about the buyer’s journey, and how to target leads in each stage, with content designed to attract, convert, close, and finally delight.
Those first three stages get a lot of attention. After all, when most of us thinking about selling a product, we start by explaining its benefits and uses, the way it solves problems and makes lives easier. Once someone buys the product, our work is done, right?
Actually, the “delight” phase of your buyer’s journey is probably the most important. Keeping your current customers happy is the best way to grow revenue and ensure the long-term stability of your business. Here’s why.
Existing customers already have a relationship with you.
Trust is one of the hardest-won commodities in business. Most of us would much rather live with something that’s maybe not perfect but which answers our needs rather than risk making a bad purchase. And if we are satisfied with what we have, the likelihood that we’d ever exchange that for something different on the off chance that it might be better is laughably low.
Because of this, it makes sense to cultivate current relationships and ensure that those clients are satisfied. Once you’ve gained the trust of one of your clients, closing a second or third sale with them is a much easier proposition. They have fewer unknown variables to factor into their decision, meaning that the risk of continuing business with you is significantly lower than finding a different solution. In the end, market research is exhaustive and time consuming. Most of us won’t look elsewhere if we’re happy with what we have.
Marketing to existing clients is far cheaper than acquiring new leads.
Acquiring new leads is expensive. By some estimates, it costs over five times the resources to acquire a new customer than it does to retain an existing customer. Some businesses approach this by devoting 85% of their marketing resources to acquiring new leads. After all, if it doesn’t cost a lot to retain customers, should you be putting more resources towards acquisitions?
The problem with this approach is that, somewhat counterintuitively, acquiring new customers is not the same thing as growing your business. You could devote a lot of resources to bringing in customers who make one purchase and then leave. On the other hand, if you focus your attention on re-engaging your current clients, you are more likely to sell more product. After all, these people already know you and like your services, so convincing them to buy again is a lot easier.
Repeat customers spend more money.
In most industries, the first purchase is the smallest. New customers are testing the waters, giving you a try before they commit substantial funds to your business.
However, the more customers come back, the more they buy. And not just in terms of cumulative sales, either: returning customers are likely to make larger purchases, and these purchases even grow larger over time. This is especially true for ecommerce sites, where trust is at a premium. Once you gain their confidence, returning customers feel more comfortable making a larger commitment.
Loyal clients promote your business for you.
Many businesses have seen tremendous growth through word of mouth marketing. They do good work, deliver a great product, and their clients not only keep coming back for more—they promote the business to their network as well.
Repeat customers are also more likely to give enthusiastic recommendations, as well as helpful reviews. Nurturing that loyalty and encouraging promotion will bring the social proof you need to help convert on-the-fence customers.
If you can’t retain your customers, you will run out of business.
There are relatively few businesses that can survive for long with no customer retention. Those that do are ones built on once-in-a-lifetime (or exceedingly rare) purchases, and even these rely heavily on referrals from happy customers to survive.
But for most business, low customer retention is a death knell. Think about it: if it’s eight times harder to acquire a client than retain a current one, then each time you lose a client you will have to put in eight times the effort to win them back. This math grows even more bleak when you consider that it often takes multiple purchases to recoup the expense of acquiring that customer in the first place, then a business that loses customers at the same rate it acquires them isn’t turning a profit.
On the other hand, clients who share their good experiences with others help bring in warm leads, which shortens your sales cycle and reduces the costs associated with acquiring new customers. So, make sure you’re not taking your current customers for granted by taking the time to delight them with your content. Show them some love, and they’ll love you back.