Along with recent technological advancements, marketing campaigns have been constantly evolving to become more efficient and cost-effective. However, most companies traditionally tend to favor developing their customer acquisition strategies rather than customer retention, despite the fact that paying attention to your current customers can yield significant returns -- many of which cannot be obtained from new customers.
Take a look at some statistics: it costs around five times more to get new customers compared to keeping old ones, and even just a 5 percent increase in customer retention may translate to a 95 percent increase in overall profits. This means that if efficiency and cost-effectiveness is the goal, shifting more effort into customer retention might just be the key.
To put it in the simplest way possible, the main objective of marketing campaigns is to increase profits. With that in mind, it would make sense to allocate more resources to your customer retention strategy as loyal customers are more likely to purchase your products or services.
Research by Gartner Group showed that 80 percent of a company’s future revenue will come from 20 percent of their current customers. Therefore it can be said that retention might even be more important than acquisition itself. What’s more is that a weak customer retention strategy may lead to losing revenue, as around 68 percent of customers leave a brand if they feel that the company becomes indifferent after initial sales.
Another reason why customer retention is beneficial is that loyal customers are more likely to post a positive review about your company or refer you to their contacts. People nowadays take to the Internet to research about a company before making a transaction. Strengthening your online presence increases the chances of converting visitors to buyers.
Customer service is one, if not the biggest factor that contributes to customers’ patronage. If people can see how well you treat your current customers or how pleasant their experience was, they are more likely to pick you among your peers. In that sense, paying more attention to retaining customers will basically have them doing your advertising for you!
The information we get from analyzing marketing campaigns is the basis for future adjustments and strategies. With that said, what’s the best source of that data than the customers who frequent your products or services?
Although the process of studying and using the data from customer retention efforts take longer, focusing on customer retention allows you to gather more relevant and in-depth information on how your company is benefitting customers and how you can provide a more personalized experience, which will ultimately lead to a steady growth in return on investment.
The contemporary challenges in engaging and approaching prospective customers have seen an increased demand for better retention marketing. The statistics have it; a properly prioritized customer retention strategy is needed should your company excel in today’s rapidly-evolving field. At BlueWing HVAC, customer retention strategies are one of our specialities. Let us help by calling (877) 960-3292.