Business
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4
 min read

The Value of Retaining Your Best Customers

While it is certainly important to always bring in new customers, managing to retain your existing customers is equally crucial. Customer retention has a variety of benefits, so here are a few reasons why you should work on bringing back your best customers.

While it is certainly important to always bring in new customers, managing to retain your existing customers is equally crucial. Customer retention has a variety of benefits, so here are a few reasons why you should work on bringing back your best customers.

CUTTING DOWN ON COSTS

While bringing in new customers is almost always a good thing, it costs significantly more than retaining existing customers. On average, acquiring a new customer can cost at least five times more than retaining a customer. Most of this extra cost comes from things such as the advertising and marketing that is needed to bring in new customers. Managing to retain your previous customers helps cuts out these costs, as you don’t need to spend as much of your marketing budget on them.

While focusing on retaining customers helps cut down on costs, it can also increase sales and profits, as the success rate of selling to an existing customer is much higher when compared to a potential new customer.

BUILDING RELATIONSHIPS

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Repeatedly working with customers helps build a positive relationship between the two parties. The more they use your product or service, the more reliable they will think your business is, causing them to continually come back. This creates a mutually beneficial relationship, as the customer is always satisfied with your product or service, and will therefore be more likely to provide you with more business and customers.

Furthermore, customers that you have a positive relationship with and continually come back are more likely to talk about your business and recommend it to others. This word-of-mouth marketing will then bring in new customers, helping cut down on marketing and advertising costs.

PROVING YOUR RELIABILITY

Retaining customers not only helps you increase profits and save money on marketing, but it also proves how good your business is at reliably providing a service or product. High customer retention rates usually indicate that your business is doing well at properly providing a service or product. High retention rates prove that your business is good at satisfying customers, as they continually come back to work with you.

Retention rates not only show your business is successful at satisfying customers but can also be used to acquire new customers. Showing potential customers that you have a high retention rate shows them that your business is incredibly reliable, making it more likely that they will start doing business with you.

CONCLUSION

While bringing in and acquiring new customers is incredibly important to growing and expanding your business, it is also crucial to focus on increasing your retention rates and bringing back your best customers. Having high retention rates not only proves to potential customers that you are a reliable business to work with, but it also shows you that your current operations are working well.

However, while customer retention is incredibly important, business growth will always come through a combination of both retention and customer acquisition. While customer acquisition brings in new customers, customer retention helps build relationships with previous customers, saves money on marketing, and attracts potential clients.


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IgnitePOST Team
Verified writer
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