Many businesses do not know about their customer base, they will just keep on relying on new marketing tools to attract new customers. This may sound odd, but my belief and emphasis have always been on understanding my customer base so that I will be able to grow and retain them. The idea behind this is that, getting new customers is difficult, so it’s important to retain the ones I have, establishing a relationship with them while I continually look for new potential customers.
Let me share with you why you should get started to work on your customer base too!
Profitability of existing customers
The process usually begins with knowing who your customers are, which eventually helps to improve their customer satisfaction, and in turn your products are being sold more to your existing customers. Statistics have even shown that the probability of selling to an existing customer is 60%, which is much higher than to a new customer reported at 5%! Note that this profitability is not just a short term, it’s much more lucrative than that. Customers who stayed longer are more likely to spend at a bigger margin.
Customer lifetime value
This might seem to be a big word, but it’s pretty simple. When we talk about CLV, we refer to two major keywords – total profit and longevity, which makes the entire explanation straightforward, “a predicted total profit generated by customers over a long run”. When you retain your customers, it means they stay. When they choose to remain, they bring your profit again and again through several revisits. Hence, I always choose to prioritize my resources on retaining my customers. And everything is quite simple here via Autobot.
Some of your existing customers, if motivated, they will do more than just announcing their permanent existence. They will introduce your business to their friends, family, colleagues, whoever they are that will bring you profit. The one thing which is great about this, is that those referred customers, combined with a little of effort from you, they are the ones you would soon retain too and if succeeded, they’ll do the same just like how your initial customers did. This is a hugely profitable infinite loop if being well taken care of.
To me, marketing is about how to attract and keep them, and I believe enough understanding of my own customer base is the core gist of action in sustaining my business. If you are able to maintain a good relationship with your existing customers, you are actually growing your customers exponentially. Now that you have a brief understanding on how customer retention can help your business grow, if you want to get started, contact us to learn more and do it in a much convenient way.