Retain or Gain
Should you be attracting new customers, or keeping existing ones?
It’s not news that we like the new and shiny. People line up for days in the rain just to be the first to get their hands on a new iPhone, or take home the latest Air Jordan’s. To some, this may seem absurd, but it’s been scientifically proven that people tend to like things more, simply because they’re new.
So, it’s only natural that companies are spending more of their time, effort, and money acquiring new customers rather than retaining existing ones. While this tactic drives new attention and awareness to your brand, is the quality of this traffic worth it? Is it really the best move for your future?
What’s the Move?
The truth is in numbers, and the numbers are saying retaining existing customers is the right move. According to recent research, it’s significantly more expensive to attract and keep new customers than it is to retain existing ones. To add insult to injury, selling to current clients is more successful than trying to target new ones.
So why are only 18 per cent of companies focusing the majority of their energy on keeping loyal customers? Maybe people aren’t doing the research. Or maybe they just don’t want to face the facts.
What attracts us to the new? Does it provide a sense of progress and innovation? Does it make us feel superior? It might, but how does it leave the customers feeling? Chances are it won’t leave dedicated customers feeling appreciated, which is ultimately what keeps them coming back.
Companies often try to attract new clients with promises of great deliverables: providing the fastest service, the lowest rates, perfect add-ons, and an outstanding experience. Whether or not these can be executed is another question. Failing to live up to these expectations breaks trust, which can lead to the loss of potential customers.
Shifting efforts to cultivate existing customer relationships is the better move. Increasing retention rates by only five per cent can increase your profits up to 95 per cent (yes, you read that right. Ninety-five).
Okay, so customer retention is the move, but how do you do it? By making them feel special, of course!
Your current client base already knows what to expect, and they’re happy with it. So throwing in random acts of kindness, or going above and beyond can only create more of a connection between company and client. A discount on a repeat purchase can go a long way.
We’ve spoken about personalization before, and we’ll reiterate its importance. Everyone is looking for a human element in an increasingly digital world. Feeling appreciated and recognized is the easiest way to keep customers around — with such a simple answer, it’s a surprise more people aren’t doing it.
Repeat customers are your company VIPs, so treat them that way! Call them by their name, offer them special deals you know they’ll be interested in. It’s all about the details, and nothing can compare to that.
We know seeing growth in clientele is a nice ego boost, but be careful you’re not forgetting about the customers who got you to where you are in the first place. Ego aside, from a strategical and statistical point of view, retaining new customers is the best strategy for your business.
Not only is keeping customers happy good for business, but there’s something rewarding about knowing people value your product. Replacing old with the new is fine until the new becomes old.