It Costs Less To Keep Customers Than Get New Ones

Often in the marketing world a big focus is put on acquiring new customers, getting new blood in the door and making sure that more and more people are exposed to your brand than ever before. So it’s easy to forget that your best source of growth is actually already in front of you, in the form of your existing client base. By investing in your existing clients and understanding what it is that makes them stay with you, you can encourage them to stay longer, buy more, and spread the word about your business. It’s called relationship marketing, and it can be one of the most effective things you do as  a business owner.

What Is Relationship Marketing?

Put simply, relationship marketing is all about forming and maintaining long-term relationships with your existing customers. The idea is that the happier your existing customers are (because you treat them so well), the longer they will buy from you – and the more they will buy as well.  But how do you decide if your business would benefit from a shift in focus to relationship marketing? There is a really easy way of deciding this. Just ask yourself these 3 questions:

• What revenue growth will we achieve if we can keep our existing customers for just one additional month?
• What will it cost us to do this, say by improving customer service or offering additional customer benefits?
• How does this growth compare (in cost and magnitude) to acquiring new customers?

Your answers to these questions should give you a pretty good idea of the benefits your business could gain by focusing more on keeping your existing customers happy, and less on chasing after so many new ones. That’s not to say you shouldn’t try to reach out to new customers – it just means that you should take maybe 30% of that effort and direct it towards your existing customers.

Why Should I Bother With Relationship Marketing?

By retaining your existing customers, you are saving yourself time, effort and money. And that’s exactly what relationship marketing does. In fact, just a 5% increase in your customer retention rates can increase your business’s profitability by up to 75%. Still not convinced? Well, did you know:

• It costs up to 5 times more to attract new customers than it does to retain your existing ones.
• Long-term customers are less price sensitive, require less hand-holding and are more likely to give referrals than one time customers.
• As much as 65% of new business can come from existing customers referrals.
• Long-term customers are more likely to buy additional products from you as you expand your resources and services.

What Are The Benefits Of Relationship Marketing?

Relationship marketing is a strategy that focuses on building long-term relationships with customers. It emphasizes investing in existing customers rather than acquiring new ones. This type of marketing provides businesses with many benefits, such as increased customer loyalty, improved customer satisfaction, and increased brand recognition. It also allows businesses to better understand their customers’ needs and preferences, which can help them create more targeted and effective marketing campaigns. In this article, we will discuss the various benefits of relationship marketing and how it can help your business grow. Win, win, win!

There are a lot of different ways to approach relationship marketing, including:

• Special offers for loyal customers
• Personalised marketing services
• Early bird offers
• Polls and live streams on social media
• Dedicated customer service channels
• Collect customer feedback and act on it
• Offer rewards and incentives

And that’s just to name a few! By investing a little money in rewarding your loyal customers, you can expect to see a significant return.

Of course, you should never abandon the idea of trying to reach out to new customers and expand into new markets, but while you’re marketing those fresh new ideas, make sure you always take a second to remember those loyal customers and reward them for their continued support of your business. Relationship marketing is a process that can take time to get right, and being treated well will always matter to everyone involved in business. Many customers chose to leave a company because of a disintegrating relationship, and instead are more likely to remain loyal to a business they know, like and trust.

At Moyralla Marketing we use social media and newsletters to help businesses manage and improve their relationship marketing, both with new and existing customers. If you would like some advice, or just want to bounce some ideas around, please just get in touch with the team today.