Do you want a marketing strategy that will cost less and substantially boost your profit margin? Everyone does, yet most marketers, knowing that it can be more cost-effective to focus on customer retention, will still set their sights on acquisition. FUN FACT: The likelihood of a repeat sale is 65%, the likelihood of selling to a prospective customer is just 20%, yet less than a quarter of all companies put their primary marketing focus on customer retention.
What’s Actually Happening?
According to recent research, nearly all companies focus their marketing efforts on customer acquisition, while fewer than 20% place the emphasis on customer retention. This is one instance when it is not wise to follow the masses.
Websites, email marketing, social media, direct mailings, SEO, PPC advertising, and web banners are more often than not dedicated to new customer acquisition. From 60 to 90 percent of the efforts made in those channels are focused on potential customers, rather than on those who have already shown an interest in the products or services, and an ability to buy.
Is The Pot Calling the Kettle Black?
Despite numbers like these, most companies agree that customer retention is achieved through personalization, continued communication, and creating a positive user experience.
Three-quarters of the businesses in this country would agree that it is essential to form lifetime relationships with customers, but fewer than half have any way to measure the effectiveness of retention efforts.
Making It Work
Though they are most often used for new customer acquisition, email marketing and social media marketing are the most effective channels for customer retention campaigns. This makes perfect sense, because those most successful with customer retention are those that focus on communicating on an individual basis, with personal messages that aim to meet the specific needs of the existing customer.
Increasing your efforts directed at customer retention can ultimately have a huge impact on your bottom line. The smallest increase in customer retention can increase profit potential by up to 95%. It doesn’t take a huge adjustment to make the switch from acquisition-style marketing to a strategy that is retention-focused.
Better yet, marketing automation can make it easier than ever to achieve the desired level of personalization that lead to customer retention and repeat sales. Inbox25 is one such service and one that we have found to have superior options for businesses seeking to improve their customer lifetime value (CLV). With the use of services like this, you can achieve very impressive numbers of repeat sales, while spending far less per sale than you would on convincing a new customer to give your product or service a try.