The Value of Keeping Loyal Customers to Your Business
Innovative technologies for getting your business noticed, strategies for driving more relevant traffic to your website and tactics for converting visitors into dollar-spending customers fill business know-how articles. And, the wisdom earns its props in building your business. After all, without new clients, your bottom line grows stagnant.
But, in the rush for fresh prospects, the shiny attraction can lead to failure in treating your loyal customers well. While reasons of history may top the list for retaining current shoppers (These are the people, after all, who made you are what you are today.), often sentiment alone fails to drive behavior. Fortunately, more compelling statistics offer inspiration to make your committed clientele a priority.
The truth is that the cost of losing clients far outweighs the financial benefits of working to retain them. Add in the higher costs of acquiring new prospects and leading them down the funnel, and the value of keeping loyal customers reveals itself.
THE COST IN NUMBERS
First, let’s look more closely at the numbers.
Retention vs. Acquisition
When polling companies, 82 percent believe that retention of current customers is cheaper than acquisition of new clients. And, the data backs this opinion with figures suggesting that the cost to gain new customers exceeds keeping loyal ones by 500 percent. Reason enough to keep valuing your loyal customer base?
Furthermore, raising the profitability of a new consumer to the level of an established client costs 16 times over the processes of maintaining loyalty. In other words, the loyal spend more money. In fact, these time-tested clients prove worth 10 times the dollar amount of their first purchase. And, ultimately, this fact equates less work with greater profit.
Plus, the spending continues. Loyal customers purchase more products from you. In months 31 to 36 of your client-company relationship, spending increases by 67 percent. And, with no product instructions required and less sales support needed, company expenditures decrease as well.
Cost of Regaining Clients
Finally, regaining these customers should they leave proves difficult and, as a result, costly. In fact, 68 percent of consumers do not return once a brand switch has been made. Therefore, the wisdom of keeping rather than luring new prospects or recapturing previous customers proves frugal.
Second, let’s review how the interaction of clients with personalization, customer service and social media further support the value of prioritizing loyal customers.
With each passing generation, personalization grows as a loyalty driver for consumers while fun and value on the dollar are on the decrease. Awareness of consumer desires and practices keeps you in the know as to how to breed loyalty with current customers. And, as with any relationship, ignoring these details loses you customers and their spending dollars.
Specifically, consider that the majority of consumers find personalized service reflects a smart, caring and meaningful brand. Therefore, failing to provide this service (easier with customer’s you know) leaves you catering to the 16 percent who find it “creepy.” Plus, personalization of purchases to client interest (again, easier to track with those you know) draws 85 percent of Millennials. And, personalization efforts grow easy and inexpensive to employ as Internet and social media features develop.
Customer Service Reality
With an Internet full of offers and options, customers prove to have the upper hand in their service expectations being met. In fact, research indicates that 79 percent of clients move their business to a competitor in less than one week (47 percent within one day) of a poor service experience.
Furthermore, 86 percent of consumers name likeability and trust as prime factors in gaining their loyalty. And, 26 percent use the words “trust and “consistency” to describe important elements of allegiance. Customer service plays a critical role in developing these elements for your brand.
Social Media Impact
With the growth of social media marketing, the satisfaction and discontent of current customers no longer remains between you and them or a close knit group of friends. This news travels even more quickly via a variety of social networks. And, both retention and acquisition efforts face the effects. In other words, problems with your company, customer service or products reaches a broad audience.
To add weight to this impact, the more people use media such as Facebook and Instagram, the more brand loyalty they demonstrate. In other words, those most loyal to your product and brand interact the most frequently via social media. And, the implications of a dissatisfied consumer magnify.
Interacting with your loyal customer base and addressing their needs through personalization and customer service saves money. Expenses associated with lost clients and the greater cost of generating new prospects, plus the damage of negative social media posts, lessen with this attention.
Of consumers switching brands, 83 percent of them felt the company they left should have done something to retain them. In fact, if discovered early, 62 percent of customer losses can be prevented. And, based on the fact that many of these lost customers result from a perceived “attitude of indifference,” simple, inexpensive solutions keep them browsing your site.
If you are ready to start interacting with your customers, get powered by PerQify in 2017! Keep those loyal clients coming back and watch your business grow. For more information on our services visit our website at http://www.perqify.net
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