Customers are arguably one of the most valuable assets for any business. But what should be the top priority – customer retention or customer acquisition?
It’s not a secret that most marketing strategies have historically focused on acquiring new customers, but at the expense of existing customers. Recent surveys show that a significant number of marketers still prioritize customer acquisition and brand awareness. Contrary to this popular approach, statistics show that marketing to existing customers should be the top priority, especially when it comes to direct mail marketing. So, how can you facilitate better customer retention?
Essential Statistics on Customer Retention
- Information from reputable sources indicates that existing customers tend to spend over 65% more than newly acquired customers.
- According to the Harvard Business Review (HBR), a business can increase its revenue by up to 95% by expanding its customer retention by just 5%.
- Businesses lose approximately $1.6 trillion every year when customers jump ship to a competitor.
- Retaining existing customers is up to 16 times cheaper than acquiring new customers.
- Around 20% of your existing customers will generate nearly 80% of your profits.
- Most businesses lose 15% of existing customers annually.
- Since existing customers are already aware of the quality of services offered by a business, they are 50% more likely to do so again as long as you provide value.
- Business costs can drop by up to 10% by increasing the retention rate by 2%.
Tips for an Effective Customer Retention Strategy
Direct mail marketing is a great way to target an audience, gain their attention, and foster a personal connection with them. Better yet, it’s an ideal avenue to launch a customer retention strategy, especially when you have a reliable partner. It allows a business to gather information on consumer preferences and appreciate existing customers with targeted advertisement right at their doorsteps. But remember to send out tailored messages that portray you as a trusted advisor who offers value.
Make the Wise Decision – Retain Your Customers
If the market statistics highlighted above are anything to go by, prioritizing a customer retention strategy should happen sooner rather than later. Your business worked hard to acquire new customers and improve brand awareness – don’t let all that effort go to waste. Make the wiser decision by making marketing to existing customers your top priority.