From a marketer’s perspective, the goal of marketing is to attract new customers. Lead generation and customer acquisition have always been the focus of marketing departments. But as years passed, there has been a shift in marketing trends. Instead of solely attracting new customers, marketers are now spending more time on improving customer retention rates. Fortunately, marketers can now come up with different effective promotional campaigns to target the needs of existing customers using small business financing. Since marketing efforts can be costly, applying for small business financing to boost working capital can go a long way.
Studies show that improving customer retention creates a long-lasting impact on your bottom line. In fact, with just a 5% boost in customer retention rates, your profits can increase by 25% to 95%. With this in mind, here are five other reasons why it’s important to market to your existing customers:
1. Existing customers spend more money
A study by Localytics confirms that loyal customers are willing to spend more money. They are also the ones who patronize your products and services over that of your competitors. Since they already trust and value your company, they aren’t as price-conscious as new customers and they are more willing to spend more. Furthermore, many people often associate steeper prices with quality products and/or services. Your existing customers know that your company is trustworthy and capable to meet (or exceed!) expectations.
2. Positive customer relationships improve brand credibility
Customer services play a huge role in promoting customer loyalty. So if you have a loyal customer base, this could be an indication that your company delivers great customer service. When your potential customers notice that you have repeat clients, they will trust your business more because even in the age of technology, word-of-mouth advertising is still the most effective form of advertising.
Make sure to offer outstanding customer service at all times so your customers will recommend your products/services to family and friends. Some examples of great customer service include:
- Making your customers feel special.
- Creating memorable experiences.
- Addressing customers by name.
- Rewarding loyal customers with free stuff, discounts, or promos.
- Providing fast and convenient customer support.
- Responding promptly to emails and social media.
- Customizing your automated replies.
And more! Don’t be afraid to get creative when it comes to formulating ideas for improving customer experience.
3. It’s easier to sell to existing customers rather than to new
Since your existing customers already trust you, it’s easier to sell products to them than to new customers. Your regular clients know you are a trustworthy company and because of this, they’ll be more willing to make future purchases that can help speed up your sales. On the other hand, persuading your leads to purchase from you often requires more time, money, and effort.
It takes far more effort to convert leads into paying customers, while your existing ones may only need a slight nudge. Be sure to consistently provide a pleasant customer experience – both in the quality of your goods and services, as well as in customer service. Shift your company’s focus and make an effort to retain customers. If done properly and carefully, you’ll make quicker sales from satisfied clients.
4. Aid your product expansion efforts
The goal of every business is to grow and expand. If you plan on introducing a new line of products, the best way to grow your business is to curate and sell products that can be sold to your current customers. Cross-selling is more effective if you’ve already established a strong relationship with your target audience. As mentioned, your existing customers will be more open to trying new products or services because trust has been built. You can inform them of new products/services by sending newsletters, posting on social media, or through SMS.
5. Your existing customers will bring in new customers
You can spend thousands of dollars on advertisements, but word-of-mouth advertising remains to be the most effective way to convert leads into customers, so making it easier for your customers to leave a review detailing their experiences with your company is a wise move. Set up a social media page and encourage your customers to leave comments and suggestions. In this way, prospects will be able to see what your customers are saying about you.
Boost Your Marketing Efforts with the Help of Small Business Financing
Without a doubt, companies need customers to boost sales. When implementing marketing ideas, quick access to working capital is necessary. With small business financing, business owners can fulfill their goals and get the funding they need in order to make it happen. Many lending companies offer different loan programs that can help you get additional funding tailored to support whatever your company needs.