With the modern markets evolving, blending, and expanding rapidly, there is a relentless push for businesses to discover and capture new customer demographics. However, is this really the best digital marketing tactic to take your company to the next level? While seeking new target customers is a solid approach to achieving significant business growth, there are myriad reasons it is imperative for a company to focus on its existing customer base.
Common Mistakes Associated with Obsession with New Customers
In a world of cutthroat competition, paying more attention to the search of new customers at the expense of nurturing the existing ones is like fetching water with a perforated container. The problem is that the cost of acquiring new customers is much higher than the cost of retaining the existing ones. Thus, by reaching for new customers instead of caring for the existing ones, business organizations make the following common mistakes:
- They spend more on less profitable customers.
- They easily lose their existing customers to competitors.
- They miss the opportunity of building a clientele that is completely loyal to their respective brands.
Do Not Forget Your Existing Customer
Clearly, pursuing new customers without paying adequate attention to retention rate can be a costly affair. Below is a rundown of some benefits of placing your existing customers at the center of your digital marketing strategy.
A study published in the Harvard Business Review shows that increasing customer retention by 5% can increase a company’s profitability by up to 95%. Furthermore, the cost of attracting a new customer is five times higher than the cost of keeping an existing one. Thus, an organization can save a considerable amount of resources and enhance its profitability by investing in customer relationship marketing (CRM) as opposed to banking on new customers.
2. Satisfied Customers will Market your products on Your Behalf
As a popular saying goes, “a satisfied customer is the best advertisement.” When it comes to online business, building trust can be a daunting task. To get the job done, you should focus on ensuring that the customers you are already serving are 100% satisfied. In the digital world, a negative review can deal a major blow on your reputation. On the other hand, satisfied customers will give your positive reviews and bring you more customers through referrals. Thus, in addition to maintaining a stable income from the existing customers, CRM can also help you acquire new customers at the minimum cost possible.
Focusing on the existing customers can help an organization to build a solid reputation within a given niche. On the other hand, focusing on new customers at the expense of the existing ones may render an organization’s resources necessary to cater for many different groups inadequate. This can be detrimental to a business especially if the existing customers have higher expectations in terms of customized content and messaging.
How to Care for Customers in the Digital World
For years, small businesses have excelled at customer service with their community ties, personal touch, and attention to details. However, it is becoming harder for them to stand out as bigger businesses make huge investments in digital communication channels such as live chats, messaging, and social media. All in all, any organization, big or small, can do the following to take care of their clients in the digital world to keep them engaged and coming back:
- Be available all the time. Modern customers like to be heard when they want. Thus, organizations should have a customer service that is available 24/7 on as many digital platforms as possible.
- Use customized content. Customers want to feel valued by businesses. Thus, they are not interested in the generic digital content. They want content that is addressed specifically to them to address their unique problems.
- Make customer interactions personal and emotional. When customers contact organizations, they want to be sure that they are talking to humans. Nothing is more annoying than sending a message to an organization only to get an auto-generated response. To keep customers engaged and coming back, it is important to have a way of listening to them in person and even developing meaningful relationships with them.
Overall, it is apparent that, in the digital world, customer retention is important for business growth. Besides, it is clear that investing in the search for new customers at the expense of keeping the existing ones is inefficient. Thus, inasmuch as working to attract new customers is a great business expansion strategy, focusing on the existing customers can become more advantageous.