If you want to ensure that your profits are strong, and your retention rates are high, you’ll also need a customer loyalty strategy. A few key insights for building your loyalty strategy include:
Retaining an existing customer costs significantly less, both in terms of marketing and maintenance, than landing a new one.
The cost of consumer acquisition versus customer retention can reach as high as 700%, according to a report by Frederick Reichheld of Bain & Company. When it comes to revenue, customer retention is hugely important to consistent growth and planning. The more committed customers you have for the next financial quarter, the easier it is to make budgetary decisions. Another benefit of retained customers over acquired customers, is the fact they generally require less maintenance.
Repeat customers are more likely to spend more money on each purchase.
The bottom line, repeat customers spend more money; 300% more according to RjMetrics. Not only are your repeat customers purchasing more over time than new customers, they likely trust you enough to purchase your more expensive products and services.
Loyal and satisfied customer give peer recommendations, referrals and glowing online reviews.
In today’s hyper-connected world, people aren’t shy about sharing their opinions and consumers are listening. In fact, according to a 2016 Buyer’s Survey Report, 62% of consumers are relying more on peer recommendations than the year before, and 49% listed colleagues and peers as one of their top three resources in the search for new products and services.
One of the most underutilized and straightforward approaches to positively affect your company’s bottom line is to focus on a customer loyalty strategy. Are you ready to get started?
Center for Practical Management is a strategic business partner with Raddon, a Fiserv Company. Learn more at www.raddon.com