Why your businesses should focus its energies on existing customers

Incentive Solutions

A bird in the hand

It’s generally understood that whomever first penned the proverb “A bird in the hand is worth two in the bush” was talking about falconry; but we reckon they could just as easily have been talking about customer retention.

Our version of the saying would go something like this; “A customer in the hand can grow your business for a fraction of the cost of searching for new ones.” Less catchy, but entirely accurate.

In fact, data shows that the cost of acquiring a new client today can cost up to five times that of holding on to an existing one and, as we navigate inflation and threats of an imminent NZ recession, we’d hazard a guess that most business owners would prefer to be as efficient as possible when growing their profits.

The good news is that by looking after your existing customers, you can be. Research by Frederick Reichheld of Bain & Company shows that increasing customer retention rates by just 5%, can help a company increase its profits by anything from 25% to 95%. With this in mind, let’s consider the top three ‘whys’ and ‘hows’ of customer retention.

WHY your businesses should focus its energies on existing customers

1. Your existing customers are big time savers

They know the drill. They understand your company, your systems and your ways of working. There’s no need for on-boarding initiatives or widespread introductions. They’re set up to go and likely already deliver 65% of your company’s business. One survey revealed loyal customers are five times as likely to repurchase from you, five times as likely to forgive a mistake, four times as likely to refer you to other customers, and seven times as likely to try a new offering from you. Any additional time you choose to invest in these clients will pay for itself.

2. You can leverage their trust to sell more

If you’ve already got some runs on the board with a customer you will have built up a sense of trust. You have an established working relationship, having proven you’ll do what you say you will and that your product or service is fit for purpose. This gives you a great platform from which to scale your business relationship. Statistics show the success rate of selling to a customer you already have is 60-70%, versus 5-20% for a customer you haven’t already engaged with.

3. They can grow your customer base better than you can

Your existing customers have stuck around for a reason and could be your best form of advertising. Word of mouth marketing continues to be the most powerful form of promotion (just look at all the social media influencers making a living online) and happy customers can be great brand advocates. Statistics shared by Referral Candy show over 80% of satisfied customers will refer products and services.

HOW to ensure your existing customers are happy customers

1. Invest in customer relationships

Customer loyalty is an outcome of customer relationships and, product or service aside, people buy from people. A customer relationship, much like any other relationship, requires ongoing investment and attention. So, make an effort to check in regularly with your loyal customers and ensure your product or service is still best serving their ever-changing needs.

2. Maintain quality

Your repeat customers deserve the best, they are the reason your company remains in business, so never rest on your laurels, you’re only as good as your last transaction. An American Express study found 33% of customers will consider switching companies after just one instance of poor customer service. Keep your service and quality top notch and give them no reason to leave.

3. Reward loyalty

A little recognition goes a long way. A customer loyalty programme is an excellent way to reward custom and ensure retention. At Incentive Solutions, we are specialists in reward strategies, with over 25 years’ experience in helping companies retain and reward loyal customers. We use state of the art technology and a tiered benefits structure to deliver a world of rewards that you can personalise to your own customer base. And all at a fraction of the cost of what you’d pay to attract new customers to your business.

Ask the experts

There’s never been a better time to reward loyal customers. Get in touch today for a no-obligation appointment with one of our specialists and discover the true value of a modern and competitive customer loyalty programme. Don’t delay on this important growth opportunity.

Ready To Talk?

If you’re thinking of how to start growing your loyalty in the B2B sector, schedule your FREE and no-obligation consultation with one of our specialists.

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