We spend a lot of time, money, and effort in our marketing focusing on new customer acquisition. It seems like the logical thing to do, focus on bringing in new customers because your current ones will return if they’re satisfied. But will they? It’s easy to forget that our current customers came to us for a specific reason, and they can leave for specific reasons too. If you spend all of your time looking only at new customers, only at trying to bring in more people, then you may create problems for your current customers and your company. The bottom line, it’s important to remember to retain.
The Pareto Principle, also known as the 80/20 Rule, states that, in many situations, 80% of the effect will come from 20% of the effort. The same is true when we look at our profits and customers. Only about 20% of our customers are generating the vast majority of our revenue. So, while you’re out looking for more and more new customers, you are probably doing more work than necessary. That doesn’t mean you ignore new customer acquisition entirely, but it does provide a better insight into both acquisition and retention.
Consider this, who are those vital few customers that generate so much of your revenue?
The reality is you currently have a vital few. Who are they? What are they buying from you? Why have they chosen your brand instead of another? You need to explore and understand the answers to these questions because they will define the foundation of your retention strategy. If customer service is the primary reason they stick with you, then you need to make sure that the same customer service is a priority. If they love a specific product or service, then discontinuing that same item is probably going to hurt your revenue. Understanding why they choose you is vital in your efforts to remember to retain that customer segment.
Perhaps the single best way to aid in your quest for retention is to take the time to talk to your current clients and find out why they have stayed with you. Look at those vital few that generate most of your revenue and see why they spend that amount of money. Ask the customers that have been with you the longest why they stayed. With this information, you can better understand the strategic future of your business. If, as the previous questions asked, they love your customer service, then you need to make sure you can sustain that as you scale.
Whatever the reason loyal customers stay with you, it’s important that the experience remains the same for them, and that the same quality carries forward for new clients as well.
At its core, a solid retention strategy isn’t about loyalty programs, it’s about understanding your customers, what they need, what they want, and what they really take value from. So, next time you look at your marketing plan and think of how to acquire new clients, think about how long it’s been since you talked to your current customers. If it’s been a while, take some time to find out why they stay. Remember to retain the customers that have helped you so far. You won’t regret it.
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