A Bird in the Hand...
We often say it’s worth making more effort to retain customers or members rather than just concentrating on finding lovely shiny new people to add to your hopper. Why is that? Here are 5 good reasons:
It costs less to retain a customer than acquire a new one
We bet you know your CAC very well. But are you as clear on your retention costs? We can pretty much guarantee you’ll find the cost of retention is many % lower than acquisition.
It uses less of your resources
Your existing customers know your product well already, so you don’t need to spend time and resources on educating and getting them comfortable with what you do.
They spend more with you
There are plenty of studies that show that if customers like what you do and are finding value in it, they will trust you above other players in your field, and be likely to spend more on your other products and services. By contrast, it will take new customers longer to get to know you and perceive the value you bring, so will be less inclined to fill up their baskets early on. If you recalibrate your focus closer to retention and slightly away from newbies, you may be able to use some of the net gain in resource deployment to expand your products or services.
Provides Resilience and Stability
If you can be confident of your customers’ loyalty, you will be in a much stronger position when times get tough. While Covid was terrific for the subscription economy – people were spending less going out, so were happy to sign up for new products and services - after things reverted to normal, it began to be harder to get cut through and find new customers.
They can be your biggest advocates
We know, we know, we can’t stop banging on about how your customer community can be your biggest “in-field” marketing channel, but that doesn’t make it any less true. Think of a brand you love personally and we can guess you’ve mentioned it to a friend or colleague. Then think about a product or service you have recently signed up to – did it come from a recommendation from someone you trust? We need say no more.
So instead of chucking more money at the acquisition wall, why not take a moment to review your retention strategy and ask yourself if you’re giving your current customers enough love.
Brand new Customer-Community Building Crash Course 🔥
As you know, we feel brands can offer more value and stickiness to their products and services by developing community offerings - places where your customers can come together around their shared passions, values or pain-points. So why not check out our brand new 7-day crash course on this very subject? A simple email delivered to your inbox every morning to give you the building blocks on how to approach this opportunity. Oh, and did we mention it is free? Sign up here today and find out how you too can benefit from this growth strategy.