The value of the existing customer
It is the ultimate goal of an entrepreneur to maximize profit. Increasing sales by attracting new customers is one of the major objectives that may come hand in hand when trying to get to the ultimate objective. But in this process companies lose focus on their existing customer base.
Why is it important to retain the existing customers?
The cost of gaining a new customer is 5 times the cost of retaining an existing customer. In the long run it is far more profitable to retain an existing customer than to get a new one. Over time it takes lesser effort to make a customer do repeat purchase than to find new customers. If you have a lot of satisfied customers who repeatedly buy from you then it will inevitably build your brand name and reputation of the company. Without stopping there, the repeating customers become the source from where new customers are introduced by spreading the word about your good products and services. Is there better advertising than this? Therefore it is vital to keep your existing customers satisfied and loyal because they will make sure your business succeeds and grows with time.
How to gain higher retention rates
Better customer experience (CEM)
Through Customer Experience Management companies give their customers a better experience. Business or functional leaders will use this information in order to create unfulfillable expectations and better experiences with their products and services by understanding past, present and future buying patterns of the customers.
Customer surveys and feedback
A well-designed survey is not simply one that brings forth the desired information. It must itself avoid becoming an unfortunate aspect of the customer experience.
Utilization of customer information
Identify the largest purchasing geographic segments and invest more on advertising and sales resources in that area. Collecting and...