WHY CUSTOMER RETENTION?

Customer retention is the lifeline every business. As much as you seek new customers, it is more important to focus on the already existing customers you have.

If your business is involved with marketing ans sales, you would agree increased revenue is the key to success. In quest for this increase, many sales persons get overwhelmed with searching for new customers while forgetting to retain the already existing ones. Even though it is a generally known fact that it is much easier and cheaper to convince already existing customers to do more business with you than new customer.

Check out the amazing statistics:

  • According to Bain and Company, a 5% increase in customer retention can increase a company’s profitability by 75%!
  • Gartner Group statistics tell us that 80% of your company’s future revenue will come from just 20% of your existing customers.
  • According to Marketing Metrics it’s far easier to (about 50% easier) sell to existing customers than to brand new prospects.

Bain and Company also report that attracting new customers will cost your company 6-7 times more than keeping an existing customer.

The statistics show that the value of customer retention can never be over emphasized. But just in case you are not yet convinced; here’s a few reasons to convince you to begin to take customer retention more seriously:

  • Higher conversion rates

It is much easier to get already existing customers to pay you than to convince new ones to pay you. I f you gave them great value for their money for the initial transaction, it would very easy for you to get them to be recurrent patronize you again because they already trust you for your work.

 

  • Lower Cost of Marketing
    Already existing customers would naturally refer you to new clients. Once they trust you and are satisfied that you would deliver, be trust assured that they would effortlessly refer you to other people who would require your services. Thus reducing the cost of marketing.

 

  • Increase Profit
    Selling to existing customers would not require emphasis on price as they already trust you for your service. Thus you would not need as many discounts as you would usually use to attract new customers.

 

The key to customer retention, however, is this: BUILD TRUST RELATIONSHIP



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