Key takeaways
Running a business requires a sharp focus on numbers. Aside from everyday financial info, the number of customers you have, retain, or lose can be a big indicator of success versus failure.
One big question business owners ask: should I focus on retention or acquisition?
While bringing in new customers is important, you must also maintain good relationships with the customers you already have. The power of a great relationship is major for your business. Of course, you have to keep attracting leads, but it’s often more beneficial to your company to put an even greater focus on keeping existing customers.
Research shows that existing customers account for 65% of a company’s business. That’s because consumers like staying loyal to brands when they connect with them and build strong relationships. So they’re more likely to keep making purchases.
It’s time to ramp up emphasis on keeping those customers around. Here are five great reasons customer retention is more important than acquisition:
One of your biggest business concerns is making sure you see a profit. Most business owners believe acquiring a new customer will generate the most revenue. New business keeps things moving forward, but the cost of acquiring a new customer is more than the cost of keeping a current customer around.
Getting a new customer can cost you five times more than keeping an existing one, and boosting customer retention by 5% can cause a 25% to 95% increase in profits.
Why? Because these customers have already supported you and are already familiar with you, so they’re more likely to buy again. When you can build a solid bond and create amazing experiences, they’ll trust you more with their business.
Focusing on your existing customer relationships helps you save, and in turn, boost your profit margin.
Once a customer makes a purchase, the relationship has begun. They know your business, but more importantly, you know your customer. You know their past buying behaviors and what they prefer. You can base your strategy on what they’ve looked at or spent money on. Then, you can market your business precisely to them.
Personalization is key in making sales to modern consumers. The better you know your customers, the better you can create messages and experiences just for them. Create specific audience profiles that go in-depth on their interests, buying behaviors, and desires.
The longer they stay a customer, the more information you have on them to strengthen the relationship.
Getting new customers focuses more on short-term sales and getting a lot of money fast. While this may work great for the near future, it won’t benefit your business in the long run. If instant-gratification sales are all you’re focusing on, it will be hard to keep growing and building sustainable relationships that last beyond one purchase.
Customer retention relies on developing a lasting relationship with your customers and making sure they keep looking to your business for services. This requires putting more attention on meeting their needs and directing your marketing campaigns toward these individuals, rather than putting it all toward acquisition.
Customer retention is a major part of your marketing flywheel, which is a self-sustaining model that ensures you have a steady stream of prospects and customers. But without focusing on your existing customers, your buyers will shoot out of the flywheel when they hit any friction.
When you build great relationships and satisfy your customers, they’ll become brand promoters that keep the wheel turning. That’s how you build momentum as a business and keep a large pool of happy customers.
People talk. They love to tell their friends about their best and worst brand experiences. Loyal customers who trust your company will most definitely tell their friends, family, and colleagues when they have a great interaction or experience with your business.
This is how you turn regular customers into satisfied, thrilled customers and, hopefully, brand promoters. These promoters will tell everyone about you, leave great reviews, follow you on social media, and keep coming back for more when they need a new product or service. They’ll think of you first when they need something.
When you’re only focused on snagging new customers, you miss out on a major opportunity to build a network of brand promoters that will lead to stellar business growth long into the future, not to mention all the reputation boosts you’ll get.
While gaining new customers is still important to your business, retaining the customers you already have is even more important. Focusing on these relationships more with your inbound marketing strategy will benefit your business in the long run and get you the growth numbers you most want to see.
One way to foster great relationships is to send out the right content to your current supporters. You need to keep engaging these audiences with your content marketing channels to show them you care.
Each component of your content strategy helps you turn your marketing flywheel. Your goal should be to engage people with outstanding content along every step of their journey, whether they interact with you on email, social media, or your website.
ContentBacon is ready to help you get your marketing flywheel moving with sizzing, spicy content. Contact our team to learn how we can help you completely revamp your inbound marketing approach.