For many businesses acquisition is placed as a high priority. This is not surprising: new customer growth is easy to track and produces immediate results. This is in stark contrast to retention, where everything revolves around customer retention and repeat purchases. And success is only revealed later, with a focus on loyalty. As a result, it is understandable that retention is frequently overshadowed by acquisition. After all, why focus on something that appears to be for the future? However, you may wonder if this thought is justified. Especially if you know what opportunities remain when retention is neglected.
Less Costs With Retention
Using external channels, such as those used by Google and Facebook for acquisition? Existing customers don’t need this because they already have the data and channels in place. This makes reaching out to existing customers less expensive than attracting new ones. According to research, selling to an existing customer is at least five times less expensive than acquiring a new customer. And, according to e-commerce platform BigCommerce, the top 10% of your current customers spend three times more than the rest of your customers combined.
The Trust Has Already Been Established
Remember that existing customers are familiar with your service and product. And they are the ones who can provide useful feedback, allowing you to improve your offer and services. Finally, and perhaps most importantly, existing customers are people who have already demonstrated their trust in your brand. That is extremely valuable! Let’s build on that trust to increase loyalty. As a result, you can convert an existing customer into a devoted ambassador of your brand. The customer as an ambassador, it definitely pays off!
Strive for Balance
Count your wins, especially if you’ve only recently begun to prioritize retention. Then you’ll realize how much room there is for development and improvement. The more you learn about your existing customers’ needs, the more personal and relevant the interaction becomes. This increases conversion and boosts sales. But what about shifting the emphasis from acquisition completely to retention? Don’t do it; acquisition is still required. So, concentrate on the balance with an ideal KPI framework that accommodates both acquisition and retention metrics.
Personalize for Each Customer
So, if retention has so much potential, how to get started the best way? Personalization is the answer. Let’s have a look at the reasons behind this. According to recent research by the organizational consulting firm McKinsey & Company, more than 75% of customers will return to you if you are relevant to them and have an offer that meets their specific needs. Approximately the same number of customers leave while feeling more positive about your brand. And this while conversion rates rise by up to 76% on average.
Use AI to Deploy Hyperpersonalization
You can see the power of personalization there. Which, you may now use for millions of clients of the same organization owing to the use of artificial intelligence (AI). Regardless of the size of the channels, products, or customer base, the technology can provide a personalized and relevant journey to each customer. AI is completely scalable, provides objective interpretation of customer data, and operates automatically. This relieves an organization of a significant amount of work. And, as the algorithm learns from each interaction, it gets to know your customers’ needs better and better, increasing the relevance.