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.
Reduced Costs Through Retention
Are you still relying on external channels like Google and Facebook for customer acquisition? It's time to rethink your strategy. Your existing customers hold the key to a more cost-effective approach. They come with valuable data and established channels, making it more economical to engage with them compared to acquiring new ones. Research shows that selling to an existing customer can be at least five times cheaper than pursuing a new one. Moreover, according to the eCommerce platform BigCommerce, your loyal top 10% spend 3x more per order than your lower 90% of customers, and your top 1% of customers spend 5x more than the lower 99%.
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
Take stock of your wins, particularly if you've just started focusing on retention. You'll quickly see the potential for growth and enhancement. As you gain insights into your existing customers' needs, your interactions can become more personalized and relevant, ultimately driving conversions and boosting sales.
However, should you shift your focus entirely from acquisition to retention? The answer is no; both are essential. Instead, aim for a balanced approach by establishing an ideal KPI framework that considers both acquisition and retention metrics.
Personalise for Each Customer
In an era driven by digital innovation, redundancy in communication should be a thing of the past. For retailers committed to optimising personalisation, it's essential to harness the wealth of existing profile and behavioral data, thereby eliminating unnecessary and irrelevant interactions. Through the strategic use of personal data, brands can finely tailor their offerings to align with the unique needs and preferences of each individual customer.
Our in-depth research into retail and eCommerce personalisation underscores the pivotal role it plays across various stages of the customer journey. Notably, when customers engage in repeat purchases of a product (73%), they anticipate a high level of personalisation to enhance their experience.
Use AI to Deploy Hyper-personalisation
You can see the power of personalisation there. Which, you may now use for millions of clients of the same organisation owing to the use of artificial intelligence (AI). Regardless of the size of the channels, products, or customer base, the technology can provide a personalised and relevant journey to each customer. AI is completely scalable, provides objective interpretation of customer data, and operates automatically. This relieves an organisation 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.