Take a few moments and think of all the inactive customer files you have in your file cabinet. Business owners often make the costly mistake of servicing a customer once then assuming "they'll stay" as a customer or client without maintaining and growing that relationship.
A year later that business owner is wondering what happened to that customer and where they went. Why haven't they hear from them? Did they leave? If so, why?
There are many reasons a customer or client may leave you, but the ones you will hear most often are:
- They felt your pricing was too high or unfair.
- They had an unresolved complaint.
- They took a competitors offer.
- They left because they felt you didn't care.
When you consider that the last two make up the majority of why a client or customer will no longer use your service or buy your products - it can be a hard pill to swallow. After all it means they are an inactive client because they felt you didn't care about them and your competitor did.
This makes sense when you consider that customers often purchase your service or product because they have developed a relationship with you, they owned another product or yours, or they were referred to you by a friend or associate.
When faced with the above facts why is it businesses spend 80% of their marketing dollars going after new customers and clients rather than nurturing, retaining, and maintaining the customer relationships they already have?
Before you spend your time and money going after new customers and clients you do not currently have a relationship with consider the following statistics:
- Repeat customers spend 33% more than new customers.
- Referrals among repeat customers are 107% greater than non-customers.
- It costs six times more to sell something to a prospect than to sell that same thing to a customer.
As you can see your marketing dollars will go further if you use it to build, nurture, and develop your customer relationships. This isn't as difficult as you think. Building these relationships just means treating your customers and clients as if they truly are your strategic partners and showing them that you truly care about them. It's important to try to satisfy them with the right products and services, supported by the right promotion and making it available at the right time and location. Customers can easily detect indifference and insincerity and they simply will not tolerate it. Long-term client and customer loyalty is a long-term challenge that you must strive for every day and with every transaction no matter how big or small.
While a growing business needs to constantly capture new customers, the focus and priority should be on pleasing your existing customer base. Companies that fail to nurture and retain their customer base ultimately fail. You will also spend twice as much to get new clients as you will in maintaining your existing customer base.You will also be limited in your ability to attract new clients if you can't hold onto and satisfy your existing customers and clients.
The bottom line is that one of the key components in marketing and business growth is to spend the majority of your time and effort nurturing customer relationships, so that you get business from existing clients and customers. This is a strategy that will move you forward in increasing your sales by 50% without increasing your budget.