A business can’t run without customers, if you agree with me then I will add that it’s absolutely vital to keep your customers happy at all time. However, most companies over time lose sight or undervalue their original customers and focus their attention on acquiring new and potential customers. We at EMH Global believe that this shouldn’t be the case. We believe that an existing or past customer can bring just as much, if not more value to your business than a potential customer. Here are our reasons why we believe that there are great opportunities to be gained by paying attention to our past and existing loyal customers.
In this time of uncertainty all businesses aim to keep their costs low. It is said that it costs between 4 and 10 times more to acquire a new customer than it does to keep an existing one, some sources also claim it can cost as high as 30 times to acquire a new customer. Once the customer has been acquired, you then go on to the lengthy process of converting them to become a loyal customer. It is therefore cheaper maintaining our existing customers than acquiring new ones. This is because you already know their needs and wants so you can specifically promote to them services and products they will be likely to buy. Whereas approaching a new customer you need to find out their need and wants and market yourself hard to remove them from their current loyal brand.
An existing or past customer is more likely to recommend your product or service to their friends or family. This is an effective form of marketing simply because there is trust. Trust is a hard and lengthy process for a business and can be very expensive, but a customer recommendation is free and very effective. We can sum this point by stating that the only cost to having a referral and recommendation is to invest in making your existing customers happy. Find out how to keep your customer happy from our blog the pursuit of happiness.
On average old and loyal customers spend up to 65% more than new customers. This adds a larger portion of revenue to the business. This is because your loyal customers know what they are getting by way of quality and service. New customers are likely to have hesitation in making buying decisions when trying a new product or service. Simply put they are likely to spend less than the loyal customers. Also your current customers will be more enthusiastic to try new products from your business as they have familiarity with your goods therefore leading to an increased spending on your business.
Your loyal customers add certainty to your business. This is because with loyal customers you can easily work out the lifetime value of their custom, therefore enabling your business to make a better projection of its future growth. On the other hand with new and prospective customers it can be very hard to predict their long term value to your business as they can switch to a competitor at any time.
As I conclude on this topic, Caution!!! We are not suggesting that turn your back on new customers or stop seeking new clients, but it’s important to have a balance, so you gain the benefits of both sides. So! There we go our top reasons to sticking to your roots and never forgetting the people that helped put your business on top.
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