Are Your Loyal Customers Worth More?
Today’s customers are more empowered than ever before. Customers engage with many different companies and brands which are all vying for the customers’ attention. The truth is, for many businesses, customer retention is a battle between your business and someone else’s. The strategies you employ usually make the difference between a successful business or one dependent on acquiring new customers.
Why are your loyal customers important?
Loyal customers are important because they can essentially become your brand ambassadors. Customers that are engaged with your business are much more likely to become repeat buyers and promote your brand. Research suggests that 78% of your loyal customers are likely to spread the word about your business, 68% are likely to buy more frequently, and 54% refuse to buy a similar product elsewhere (Customer Insight Group).
Further, it can cost up to 5-7 times more to acquire new customers than the cost of retaining one. Going the extra mile when a customer walks in the door really does make a difference to your bottom line.
Repeat customers are important to the growth and longevity of any business. If staff and your loyalty schemes are set up for a great customer experience, this should have a positive impact on the overall perception of your business.
Customer retention is critical to successful business growth
Over their lifetime, loyal customers are likely to spend up to 10 times more than a single-visit customer. Your new customers are much more price conscious and thus, are less willing to be upsold to. Unsurprisingly, up to 50%-60% of all new customers simply don’t return
Returning customers, however, have a much higher lifetime value because they know your business. That’s probably the reason why almost 60%-70% of returning customers are likely to make an additional purchase and 82% don’t mind hearing from you or receiving email promotions (Customer Insight Group).
That’s important because...
- Focusing on customer retention is usually much cheaper and easier.
- Trying to get new customers is actually really expensive without a solid retention programme in place. If you get a lot of new customers through the door, but none of them stick around, then businesses tend to spend a lot to keep more new customers coming back.
- Your monthly revenue is made up of new customers, returning customers and the customers that you’ve won back.
Read our sure-fire tips on how to create customer loyalty.