Here is a marketing truth: existing customers innately have more value than one that requires being won over. The fact is, you either have customers or prospects. One is committed to your brand, and one is not. Yet it feels like businesses continue to dedicate more time and attention to the notion of winning new customers than ever before. And the numbers don’t lie. According to several research studies, roughly 44% of companies admit they place a greater focus on acquisition, whereas 18% focus more on retention; the rest claim to have an equal focus.
I’ll be honest; I can’t seem to wrap my mind around these numbers. We should know better. We all know that customer acquisition costs five times more than customer retention. Jay Chiat, co-founder of Chiat/Day once observed: “You start losing a client the moment you get it.” So, while newer is better might apply to smartphones, tablets and TVs, it’s far from true here.
It’s been my personal experience that you have much more to gain by upselling and cross-selling existing loyal customers than you do by pursuing new ones. Rewarding your loyal customers is the best way to keep them loyal.
What do you think?
Joe Bouch
CEO, 78Madison
78Madison is a full-service marketing communications firm (advertising agency) located in Orlando, Florida (Winter Springs, Florida).