Marketing executives know just how challenging it can be to acquire new customers. It does not mean, however, that maitaining existing clients is any easier. As the COVID pandemic has reduced the spending power of many, holding on to existing clientele has become even more necessary. It is the existing clientele that has helped the business survive, and same should be used as the building block for growth and sustainability.

A bird in hand is worth two in the bush.  In this new year, this proverb should be the guiding principle for major decisions among Start-up and SME entrepreneurs, right to the frontline staff.

Here are a few reasons why focus and investment should be on customer retention.

1: Returning customers spend more.

It is common for the regular customer of a particular business to buy more than one product or service on a visit. In fact, according to a study by Adobe, about 40 percent of most business revenues come from repeat clients. What this means is that without this category of customers, the business hangs in the balance.

If your revenue that will sustain your business and possibly grow it to the next level is from repeat customers, then more attention and focused strategy simulation should be geared at retaining them. Retention can be achieved through the quality of services and products offered, customer experience or loyalty rewards. It is practically impossible to keep every customer who will walk into your business. However, make the effort to give them an unforgettable experience they would love coming back to.

2: Easy to plan for customers and predict needs.

A business that has known customers is quite easy to manage. You can predict both customer behaviour and business income.

With the benefit of a customer’s spending history, for instance, a business can predict income flows and create demand-driven products and services. This helps small businesses to make growth plans and predict how they might fare during a crisis like the current pandemic.

As an entrepreneur or business executive, make having repeat customers your priority. Promote this agenda to all the staff and never limit it to the “customer service department”.

3: Returning customers are low-cost marketing target.

To attract new customers, a business will have to identify customers, ask for referrals, and spend a lot on marketing. This may call for a good marketing budget.

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That’s because it takes a lot to get a new customer to visit your business if that is not on their shopping routine. In short, acquiring new customers is not only costly but time and emotionally stressful.

By comparison, a business spends less on marketing among repeat customers, especially if a business already has a customer relationship management system and strategy in place.

Since businesses rely on data to make important decisions, repeat customers give a business the advantage of having very reliable data for strategic matters.

It is from this source that businesses identify development opportunities and determine whether a particular marketing strategy is effective or not.

Human Capital International wishes you the very best of this new year. May your new goals help you create new strategies to retain your customers.

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