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Balancing your marketing actions toward new customers and loyal customers poses the question: which will produce the greatest benefit for your business?
Choosing the right customer engagement strategy is crucial to the success of your business and will go a long way in making your marketing efforts worthwhile. Read on to learn more about retaining current customers vs. obtaining new ones.
While every business relies on customers to gain profits, not every business knows how best to gain those customers. Basic math would lead you to believe that more customers equal more sales and, thus, increased profits. In truth, it can cost an outstanding 5 times more to gain a new customer than to retain a current customer. What’s often disregarded is the high financial cost of customer acquisition or gaining a new customer.
New customers requires an estimated 7 marketing touches before making a purchase. That’s 7 times a prospect needs to see your marketing message before making a purchase. Loyal customers require significantly fewer touch points, which means lower marketing costs.
Aiming for loyal customers drastically cuts back the time it takes for a sale since it takes only a small number of touch points — possibly, only one. This expedited marketing process creates a more efficient chain of sales.
Changing your marketing efforts to keep loyal customers, called customer retention, will continuously increase profitability and reduce the timeframe of sales.
The value of a loyal customer base stretches far beyond finances. Whether your business goals are sales-related or you’re a nonprofit, your key customers are those who push you closest to your goal.
If you already have a loyalty program, you can look at the customers who have signed up. For nonprofits, look at those returning clients who have attended your events or been active on your social media pages. Once you’ve narrowed your target audience, it’s easier to customize marketing campaigns.
Now that you know who you need to focus your marketing campaigns on, where do you start? Lasting customer relationships are built from superior communication, service, and offerings.
Consider utilizing an email signup form to allow customers to receive updates on your business and special sales opportunities. Offering a loyalty program with perks can also boost retention rates. These tactics can easily be advertised on social media or in newsletters. Other options include sending follow-up emails to thank clients for their purchases or to offer them future discounts.
Finding the best strategy and tactics for your business takes time, testing, and revision. Building customer retention is a long journey that can reap great rewards.
At PHOS, our team of marketing experts is here to guide you through this process and take the initiative. Get in touch with us, and we’ll help you reach the customers you need to achieve your business goals.