Keeping your customers satisfied can be a tricky business but it can be done with successful retention marketing. You can increase a customer's lifetime value this way, and in turn, increase your company's profit margin. But why is this so important? It costs seven times more to attract new customers than it does to retain existing ones. In fact, a 5% increase in customer retention can bring up to 125% in profits. By utilizing retention marketing strategies, you are saving money and building meaningful relationships with your consumers. Here are some ideas on how to incorporate retention marketing into your business strategy:
Redefine Customer Value
Many companies focus on acquiring customers by any means necessary, such as offering discounts and other maneuvers that can drain your profit. While this can bring success, consumers are getting smarter about where they spend their money and discounts alone are not enough to increase sales. People care more about the value of a product or service than finding the lowest price. This idea can also be applied to marketing. By focusing on the value of long-standing customer relationships, businesses can secure a better future of revenue for themselves.
Evaluate Your Priorities
Companies usually rank their priorities based on the profitability of each one—with acquisition at the top of the list. However, retention marketing is just as, if not more, important. 82% of companies agree that retention is cheaper to execute than acquisition. It takes time and effort to build up this strategy—results are not always immediate. But, businesses that make retention a priority will see how rewarding it can be.
Implementing retention marketing into your business strategy can give your company the ability to develop profitable relationships with consumers. Hard work pays off, so work hard to keep customers that have made an investment in you.