Customer acquisition will always be a significant driver for businesses, but customer retention can also be a great driver for customer acquisition. Moreover, a healthy retention rate is crucial for consistent growth and financial balancing.
With rapid advancements in technology, there is no reason why organizations can’t have a one-on-one, personal relationship with every single consumer they serve. In today’s competitive era, brands can’t afford to miss a single opportunity to convert prospects or encourage old customers to purchase again. The stakes are immense for advertisers to strategically attract customers and make them want to buy their products or services.
A survey by Fundera says that 65% of a company’s business comes from its current customers. Furthermore, 43% of loyal consumers will spend more on their chosen brands.
Research by Frederick Reichheld of Bain & Company explains that growing consumer retention rates by 5% boosts profits by 25% to 95%.
However, retaining loyal customers is often easier said than done. As there are plenty of options available in the market, customers are more likely to try new brands and products from new platforms instead of holding on to the old ones they have bought before. Therefore, it signifies that brands need to work smarter to hold on to their existing customers in today’s competitive market while also grabbing every opportunity to influence new customers.
According to a survey conducted by Invesp, attracting new customers is five times as costly as retaining existing customers. Also, while the success rate of selling to an existing customer is 60-70%, to a new consumer, it is only 5-20%.
Here are some ways CMOs can entice new and existing customers and add to the bottom line.
Modify Messaging According to Audience
Today, consumers want to be appreciated by the brands they frequently visit; they do not want to be targeted by generalized promotions. Current buyers and prospects have different levels of familiarity with a brand and its offerings. Hence, brands can’t expect to utilize the same messaging and campaigns for both groups and hope it will be too compelling to both parties.
Therefore, it is advised to create separate and tailored campaigns for every audience, and this means they will initially require a plan to differentiate these essential groups. With a robust analytics program that can understand audience behaviors, businesses can devise promotions that value consumers’ present needs and wants.
Action Tech-Enabled Promotions
With online shopping on the rise, there is an expectation that brands will provide money-saving offers virtually, instead of paper coupons or mailers to consumers’ devices. This new expectation is because while utilizing a digital tool, customers are only a few clicks away from deciding on the offers they get. This shift in preferences provides an opportunity for brands to get decisive consumer insights, as they can utilize technology to learn how customers react to particular campaigns.
Improve Purchase Sizes
To enhance purchase sizes, better product suggestions based on the customer’s order or browsing history to add directly to the shopping cart would be advisable. These recommendations explain a brand’s dedication to creating a reasonably personalized experience for every buyer, intensifying their relationship with the brand.
Balancing old customers and prospects can be a difficult job. But with accurate data and strategies, advertisers will find it easy to acutely target consumers despite their association with the brand and convince the existing consumers to purchase at regular intervals.