As entrepreneurs, we tend to spend much of our time thinking about customer acquisition. We spend money on marketing, advertising, and website design. We offer discounts, promotions, and special pricing to bring in that next new customer. But maybe we should shift our focus; according to The Chartered Institute of Marketing, customer acquisition costs are 4 to 10 times more expensive than the cost of retaining customers.
Consider that statement for a minute. How much have you spent on customer retention activities? For many companies, other than administrative costs of billing and collecting, their investment in keeping current customers is zero. What might it be worth to your company if you could increase the depth and breadth of the products or services you provide to your current customers? 2018 can be the year you refocus your efforts and achieve even greater success at a lower cost.
Start by reviewing what you know
- Product data. What are the top selling products or services by customer type, geographical area, and time of year? Once you have some data on the top products or services, you can start researching the buyers. If you are using a business intelligence software, you can analyze this information in graphical form.
- Customer data. Are there similarities between customers who have increased their purchases over the past few years? Look to spot any meaningful trends. You might want to track the number of employees, average revenues, Industry NAIC codes, or associations they have joined.
Then gather more information
- Survey your customers. Once you review the data, select 5-10 members who are showing increased sales activity and give them a call. Find out what accounts for their positive sales activity. Do the same for customers who have shown a decline in orders. Spend some time learning about their business and how you might help them address any concerns they have. What are their goals and how has their business changed over the years?
Design programs around the information you gather
- Customer loyalty programs. Do you have a program in place to reward your frequent buyers? Consider offering special events, unique products, or bundles that are available only to your preferred customers.
- Special terms or priority shipping. Consider offering a program like Amazon Prime that rewards your frequent buyers.
Stay in touch
- Personal notes. Try reaching out to select customers periodically with a simple “Thank you for your recent order.” In an age of digital communication, a handwritten note really makes an impression.
- Social media. If you are already active on Twitter or Facebook, look for ways to engage with your current customers. Pay attention to any feedback they share either publicly or in private and act quickly to rectify any problems.
By turning your focus to your existing customers, you can reduce the amount of time and energy you spend tracking down that next new customer. Instead, you can develop the kind of deep and lasting relationships that keep your customers not only coming back for more but also spreading the word to their friends and family. And who doesn’t want to acquire more of the right customers?
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