Don’t Lose Sight of Customer Retention

Lots of small business owners spend considerable chunks of their lives—both at work and after hours—fretting and trying to come up with brilliant ways to generate additional leads and attract new customers. And the effort is certainly an important part of marketing and growing any business.

That said, these efforts sometimes eclipse something more important: delighting your existing customers. The people who already pay for your products or services are a better source of revenue and a key source of referrals for new business.

Consider These Facts

Here are three things to know that help illustrate the importance of holding on to the customers or clients you already have:

  • It’s 50% easier to sell something to an existing customer than to a prospective one, as reported by Inc. Magazine
  • Bain & Co. found that a mere 5% increase in customer retention yields up to a 75% increase in profitability
  • Gartner Group uncovered yet another 80-20 rule: 80% of a brand’s future revenue comes from 20% of its current customer base

It all makes sense. Existing customers are already sold on your value and reliability. The most significant hurdle has already been overcome. That’s worth a lot.

Word of Mouth 

No business thrives without word of mouth from existing customers. Consumers are far more comfortable taking the recommendation of a trusted friend, family member, or co-worker than that of an ad. And it doesn’t cost you a thing when people tell others about you.

Delighting customers is the surest way to spur them on to mentioning your brand to the people they know. Conversely, disappointing them easily gets them cautioning people about you.

Keep Them Happy

Maintain a great relationship with existing customers to grow. Deliver what you promise and exceed expectations. Find small ways to show your customers you appreciate them; it’s so common to see discounts and special offers for new customers, but so rare to see them for loyal existing customers. And most importantly, talk to your customers. Ask them what you’re doing right and wrong; build on the former and work on the latter, and it won’t be long before you see the fruits of your efforts.

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