When it comes to succeeding in business, new customer acquisition is extremely important to feed the pipeline. After all, you can’t expect to generate revenue and sustain steady growth if you’re not bringing in new customers. But does customer acquisition really lead to a more profitable business?
Well, not exactly.
Most companies are so concerned with generating new business that they tend to forget about their biggest, most profitable asset—loyal customers. Numerous studies have proven time and time again that loyal customers have greater lifetime value and tend to spend more money.
In fact, the longer a consumer stays in a relationship with a retailer the more they spend, according to a study from Bain & Co. titled The Value of Online Customer Loyalty and How You Can Capture It. The study found that the average customer spends 67% more in the third year of their ecommerce-based shopping relationship than in the first six months.
Not only did loyal ecommerce customers spend more money, but they also referred more people to the business. On average, a shopper referred three people each to an online retailer’s site after their first purchase. After 10 purchases, the same shopper referred seven people to the site.
As you can see, it’s extremely important that businesses implement a loyalty marketing strategy that nurtures and maintains existing relationships with customers. This is very common in the B2C realm, where pretty much every store offers some sort of incentive to keep shopping (think grocery and drugstore member benefits programs). The B2B space can also benefit from this method. Below are several different ways you can show your loyal customer base that you appreciate their businesses.
Develop a VIP Program
There’s nothing people love more than feeling like they are a part of something special. Develop a VIP program for your loyal customers to join. As a member of this VIP program, your customers will receive special discounts, exclusive company updates, and sneak peaks into new product releases. Such “members-only” programs are a great way to engage your customers, build long-lasting relationships, and drive repeat business.
Your customers want a personalized experience. According to the 2014 Global Customer Service Barometer by American Express, 89% of consumers say personalization is pivotal when it comes to an excellent service experience. Get personal with your loyal customers by sending them birthday or holiday cards. If you’re a small organization, write your loyal customers a personal letter telling them you value their business. You’d be surprised how a simple email can touch a buyer.
Empower and Educate
Like the saying goes, “Give a man a fish and he will eat for a day, but teach a man to fish and he will eat for a lifetime.” Empower and educate your customers with useful content that will help solve their most challenging problems. Webinars, white papers, and even tips & tricks-style articles like this one can be helpful to people looking for inspiration to grow their business. If you become your customers’ go-to advisor and an indispensable asset to their team, then they are more likely to stay with your company for the long haul.
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