10 Reasons Why You Should Focus on Your Returning Customers

Businesses often struggle with the eternal conflict of what to prioritize — customer retention or customer acquisition. Many businesses choose to devote most of their resources towards attaining new customers. This uphill battle of securing the present often comes at the expense of the future. It is crucial to remember that keeping existing customers is just as important as getting new customers. While acquiring new customers might light up your sales report, it is your loyal customers who bring in the steady stream of revenue.

1. It’s Cheaper than Acquisition

The costs associated with repeat business are significantly lower. According to Wheelhouse Advisors, 70% of businesses say it’s cheaper to retain a customer than to acquire a new one. Some have even suggested that the cost of acquiring new customers can be 7 times more expensive! However, it’s good to bear in mind that even though retention is cheaper, it most likely is not easier.

2. Loyal Customers are More Profitable

Happy customers equal loyal customers, and happy customers bring better returns. According to Access, loyal customers buy 90% more frequently, spend 60% more per transaction, and therefore, deliver 23% more revenue and profitability. While loyal customers may be more open to price increase, their loyalty should not be taken for granted.

3. Customers Spread the Word

The power of word-of-mouth is indisputable when it comes to marketing your business. Loyal customers are secret ambassadors working of their own volition to spread the word of your brand’s exploits. People, especially millennials, are strongly influenced by referrals from friends and family.

4. Your Brand Will Stand Out from the Crowd

A personal touch can set you apart from your closest competitors. Going the extra mile like staying in touch on holiday occasions and birthdays will not only show that you care, it will also enable you to build and maintain relationships that will in turn shape your business.

5. It Increases Cross-selling Opportunities

Your loyal customers trust you to provide quality products and good customer service. This creates the perfect opportunity to fulfill your customers’ needs by persuading them to buy related or complimentary items.

6. Loyal Customers are More Forgiving

A research conducted by Accenture revealed that $1.6 trillion is lost each year due to customers discarding a brand after a poor service experience. Sometimes, you can get an order wrong or miss a promised deadline. Loyal customers are more likely to give you the benefit of the doubt and let a misdeed slide.

7. Retention=Acquisition

Customer loyalty is priceless and they bring in new business through credible word-of-mouth advertising. Wheelhouse Advisors vouches that just a 5% increase in customer retention can increase a company’s profitability by 75%. This proves that customers will always talk about their experiences, and they will always listen to other customers.

8. Engaged Customers Provide More Feedback

Feedback can drive a business to its fruition. Combining professional and personal skills can initiate helpful feedback from your loyal customers. A study conducted by Access shows that people who had their complaints resolved are 84% less likely to switch brands.

9. They Bring in Repeat Business

Loyal customers mean repeat business. If they are satisfied with the service being provided, they tend to make more than one transaction and try out different products. Loyal customers are inclined to purchase your goods repeatedly and spend more money over time.

10. You Earn Room to Try New Things

Once you have an established loyal customer base, your business can expand its boundaries by introducing a new product line or even a new a logo. Engaged customers are more likely to embrace and welcome the changes as long as you maintain the basic premises that keep them on your side.

Treating your customers right will always reap benefits. Are you already working towards building and retaining a loyal customer base? It is an economically advantageous step that transforms into giant leaps as your customer base grows into a source of referrals for new customers. You can encourage retention by providing incentives to your existing customers for referring their friends and family. Katalyse is here to make sure you don’t lose sight of your valuable customers in pursuit of new ones!

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