Customer Retention vs. New Acquisition – Which Matters More?

If you are a business owner in Indiana, acquiring new customers is surely one of your primary goals – after all, new customers help a business grow and thrive. In fact, if you have a marketing strategy in place, it is no doubt focused on attracting more customers to your business.

But customer acquisition, as important as it is, isn’t the only thing that your business should be focusing on. In addition to acquiring new customers, you should also be thinking about retaining your current customers. Here’s a look into why customer retention is just as important as new acquisition, as well as some tips for ensuring that customers keep coming back–

Why Does Customer Retention Matter So Much?

Focusing on customer retention in today’s world–where customers have the ability to shop and compare brands online in a matter of minutes, if not seconds–is of the utmost importance. According to one source, acquiring a new customer costs five times as much as does retaining an old one. Maintaining your base is not only necessary, but more cost-effective, too. However, business should not assume that once they’ve made a sale, a customer will stick around; they need to actively work to ensure that the customer is loyal. This requires more than just offering a great product; instead, customer retention is based on forming an emotional connection with a customer. This isn’t easy.

How to Improve Customer Retention

There are myriad different things that you can do to start building more valuable and emotional relationships with customers, thereby improving your customer retention rates. We recommend:

• Analyze customer data. If you haven’t already analyzed customer data, you should do so. Reviewing things like online behavior, preferred social media sites, age and demographics, and more can help you to acquire valuable information about your customers, and make informed choices about marketing moving forward.
• Remain available. One thing that can quickly turn a former customer into another business’s client is failing to provide reliable, effective customer service. Once a customer makes a purchase (and before they do, too), it’s important that you have customer service reps who are available to resolve any issues and handle any complaints. Everyone appreciates doing business with a company that’s responsive and makes the customer feel valued. You may be able to earn a lifetime customer simply by providing great customer service.
• Offer benefits for current customers, too. Many promotions and sales will target first-time customers – i.e. offers of “10 percent off your first purchase” or “Free shipping on your first order.” While these are great, remember that your current customers deserve some recognition, too! Get customers to keep buying from you by offering promotions that are designed to draw them in, such as “$5 off your next purchase” offers.

Hire a Skilled Digital Marketing Team

Your online marketing team should be just as focused on customer retention as it is on new acquisition. When you work with NUVEW, our digital marketing professionals will develop a marketing strategy for your company that is designed to reach customers at various stages in the sales process. To learn more about how we can help, reach out to us online or call us at 219-323-3343 today.