Why Existing Customers are So Important
The biggest portion of customers that visit your store or website will do so just one time, and in fact, some estimates put this at around the 80% mark. All the hard work that goes into marketing your brand, and the outlay involved in driving traffic your way, and then many of them turn into a one-off hit. It can cost 5 times as much to attract a new customer than it does to retain an existing one. Research also shows that you will make higher profits by retaining the customers you already have compared to taking on new ones.
Although, of course, new customers are important to your brand, so is taking care of the loyal buyers you already have. The probability of selling to a new customer is between 5 and 20%. The probability of selling to an existing customer is between 60 and 70%, and they are likely to spend more. So which is the most important? They both are in their own way but there are advantages to keeping the customers you already have.
Relegating Sales Duties
When a new business starts, it will often be the owner that deals with customers. There are not so many in the early days and it is much easier to build a relationship with them. However, as the business starts to grow this becomes unsustainable. There are only 24 hours in each day, and only so many customers an owner can deal with.
Those early customers are likely to stay loyal, as the personal touch they received will not be forgotten. However, at this point, you will need to take on employees to handle the extra customers, and you will need to train them to be a personable with the customers as you have been.
You may well feel that no one will sell the brand as well as you do, and that may well be right. You cannot expect your staff to win over every enquirer but a process that enables you to start scaling sales enables for that to happen, and you should just be looking to get your fair share of conversions. This may take some time and effort, but it will be worth it.
If as the owner of the business, you never do anything else other than sales, you will be restricting the growth, as there are other tasks you should be doing such as dealing with suppliers to ensure you are getting the best deals.
When you have created a loyal customer base they are almost like a free form of advertising. They will become advocates of your brand and recommend you to other potential customers. Past research has shown that consumers will more likely buy from a brand that they have been recommended to than one they know nothing about.
Word of mouth can create you a lot of new sales, and as those new customers become loyal too, it has a knock-on effect of even more recommendations.
Consumers that have been buying your products for some time are far more likely to give you feedback, good and bad. They will not be so concerned about picking up the phone or emailing you and telling you about a problem with something they have just received. Having feedback from loyal customers like this is invaluable, as it lets you correct any problems that a new customer may encounter, which can stop them buying from you again.
Good feedback is also great, as then you know there is something you are getting right.
Paying The Price For The Service
Long-time customers are less price conscious, as they will trust your brand and know that they are receiving a high-quality customer service. Often, when they see a similar product at a lower price, they will still pay you the premium because of the trust and service factors. It is sometimes thought that if it costs less it must be of an inferior quality, and of course, that could well be the case.
Less Marketing Costs
As it costs much less to retain existing customers, you may be able to reduce your marketing budget. This could then be extra profits for your business or could be passed on as a price reduction in the form of a special offer, free gift or loyalty bonus to your existing loyal customers.
Simple things like sending them a calendar before the start of a New Year can mean so much toward their continued purchasing of your brand.
Caring about your existing customers is vital to the continued success and growth of your brand, and letting them know they are more than just a number will be a huge help in retaining them.