Whether you’re in e-commerce or retail, your customers are your undisputed gods. The dilemma that a lot of business owners face is: should I focus on acquiring new customers, or should I pamper my returning ones?
There is no easy answer to this question.
Ask any e-commerce expert and they will tell you both are important. But, one has a definitive edge over the other when it comes to your business health.
Let’s find out more on the matter.
Returning Customers will Always Have Your Back
Who are returning customers?
They are the ones who have made more than one purchase from your e-commerce or retail business.
Research shows that such customers have a 27% chance of buying from you again after their first purchase.
Truth is, retaining an existing customer will cost you five times less money and effort than it takes to acquire a new customer. You have to invest 16 times more money to make your new customers spend as much as your repeat customers.
Here the top reasons why returning customers are invaluable:
- Repeat customers pour more money into your product or service than new ones. Their spending is 300 times more compared to the latter.
- You have a 60-70% chance of persuading a returning customer to make a new purchase. From a marketing perspective, investing your efforts in them makes better business sense than heavily spending on prospects. After all, only 13% of future consumers make a purchase.
- Returning customers can promote your business among their peers, adding to your prospective client pool. Never underestimate the power of word-of-mouth advertising, even if it comes from happy customers. The best part? You don’t have a spend a penny on marketing yourself.
- On average, 80% of a businesses’ revenue comes from 20% of its customers. Returning customers contribute to a major chunk of it. Don’t forget that how you treat your old customers also influences your ability to acquire new customers.
Returning customers save you a lot of time, effort, and money. That’s why you cannot falter in your relationship with them.
New Customers Help in Revenue Growth
On the other hand, acquiring new customers is the only way of creating a customer base for any business. You cannot have repeat customers if you do not have prospects making their first buys.
New customers are indispensable to your business, because:
- They allow you to form the foundation of your customer base.
- They help build brand recognition.
- They give you insight into what is expected of you, how can improve your current offering, and what to add to your repertoire of services/products.
- They can fill in the shoes of old customers who have moved on from your business.
So, new customers are vital to your business growth. They too cannot be disregarded in any manner.
Focus on Converting All Customers to Loyalists
Here’s a startling fact for you: 60-80% of customers who made a purchase from your business and were satisfied with your service might not return for business. One-time customers exist. It’s upon you to reconnect with them and make them repeat customers.
What is imperative for you to understand is customer relationship management is everything.
That way, old or new does not matter. As a business, whether online or offline, your focus should be on building a great rapport with all your customers. Make your customers feel special.
Here a few tips on how to convert new customers into loyalists and retain returning customers:
- Keep the connection alive. Customer relationship, like every other interpersonal relationship, needs your attention and effort. Be in regular contact with all your customers. Engage with them on social media outside your business needs. Understand what they expect from you and offer them your best possible service.
- Give them rewards. Everyone loves to feel pampered. Don’t reserve your discounts for first-time customers, make sure your repeat customers get appreciated for their trust in you. Discounts, surprise rewards, etc. work well in keeping your consumers satisfied.
- Start a loyalty program. It is never too late to jump on that bandwagon. Such programs have proven to increase Customer Lifetime Value (CLV) by 79% in a matter of just 3 months!
The Graphite Note Edge
With cutting-edge predictive analytics in tow, Graphite Note gets you all the data on new and returning customers. Compare absolute figures and percentages, learn how many customers you are currently retaining on a daily, weekly, or monthly basis.
Let the best predictive analytics guide you with your marketing and customer relationship management. Decide which customers need your immediate attention. Plan your marketing and promotional activities to fit the need of the hour.
Your customers are smart and intuitive. You should be too.