Easily forgotten, but at your peril - for those customers who have shown the foresight to adopt your fledgling products and loyalty to stick with you, are crucial for the continued success of your business.
It's worth remembering, that when it comes to business these are the key facts of life:
Fact 1. It costs between 4 and 10 times to attract a new customer than keep an existing one (Chartered Institute of Marketing).
Fact 2. Unhappy customers will tell 8-10 people, whilst satisfied ones will tell only 2-3 people (White House Office of Consumer Affairs).
Fact 3. Recommendations from people we know is the most influential form of marketing (Neilsen, "Under the Influence" Report, 2013.
Fact 4. The probability of selling to an existing customer is 60 – 70%. The probability of selling to a new prospect is 5-20% (Marketing Metrics).
Fact 5. A 5% reduction in the customer defection rate can increase profits by up to 95% (Bain & Company).
Winning Customer Strategies
So armed with this knowledge, here are 5 ways you can harness the value of your existing customers:
So where does this leave you?
This analysis will have helped you realise that not all customers are equal. Acknowledge this and structure your customer engagement strategy around it. The Customer Management Grid is one way to help you target attention where you can optimise returns - not just financial, but through addressing the key facts of life.
Chris Lorimer is a management consultant with 25 years' experience advising private and public sector organisations on how to become more successful. For more information on this article, contact Chris at firstname.lastname@example.org
Chris Lorimer is an
experienced consultant who has helped many organisations to grow through his unique 4 Ps approach.