Often, business will look and focus towards getting new customers so as to increase their revenue. The idea is that the larger your customer base, the more you are bound to earn. However, what most new businesses do not know is that often it is a lot easier to sell new products and increase your revenue from the clients that you have than from new customers. The cost of customer acquisition should be reduced as much as possible to ensure that you leverage your strongholds. In any business, your stronghold should be the client pool that you already have. These clients already like your product or service and will be willing to upgrade to maintain their loyalty to your brand.
Mistakes that businesses make
At the beginning of every business venture, often the owners will treat the customers with a lot of care and pomp. The customers will often get attracted to the business and its products based on the experiences that they have at the very start. Once the business continues to grow, many clients will fall by the way side as they become more and more dissatisfied with the impersonal nature of larger businesses. The focus of management at this time is often to increase sales and its customer base so that they can hog a larger percentage of the market share. However, in focusing more on customer acquisition than retention, they end up not increasing revenue in any way.
What should be done?
What should be done though is create a customer retention program that will not only deal with the customer dissatisfaction issues that arise but also build a rapport with the customer such that loyalty to the brand is almost guaranteed. This program, depending with the business that you are in should focus more on making customers happy than making money. In making the existing customers happy, then you stand a higher chance of earning more revenue from them that losing them. This means that through their individual happy experiences, they will then be able to share with their colleagues, friends, relatives and acquaintances. Ideally, this makes them part of your marketing campaign, which reduces your new customer acquisition cost.
As such, you should continue surprising your old customers with gifts, small perks, bonus points for loyalty and such kind of things that will keep them coming back. Consider this to be a dating game of sorts and your job is to make it more exciting. If the other party is kept interested in the dating game, then you stand a very slim chance of losing out to the competition. On the other hand, if the other party is bored and finds a better option, then you will lose out.
Customer retention is one of the most important parts of the business. With proper customer retention strategies, your business will flourish and you will stand a chance at building your dream business into something a lot bigger. This is why you should focus on customer retention as much as customer acquisition.