In business, we're conditioned to constantly be chasing the net new when it comes to growth. Just look at the number of how-to articles, templates, books, and webinars focused on lead generation optimization, sales strategies, and customer outreach and it's no wonder this is our go-to mentality.
But could greater growth potential reside within what you already have?
This is not to say you should ever give up marketing to new customers, but considering it costs five times more to land a new customer than it does to keep an existing one, it's worth looking into expanding within your current customer base. Still, only 18 percent of companies focus on customer retention while 44 percent zero in on customer acquisition.
Are there areas for you to expand where you've already landed? Is there opportunity to solve for other needs your current customers may have?
Customer acquisition can be an uphill battle
Getting new clients, for most businesses, is not an easy feat. Of course, price point, brand awareness, competition, etc. all goes into it, but to get someone to make a purchase from you, you first need to get them to buy in to your business' philosophy and trust you. And that takes time, money and resources.
Even after that investment, the odds of successfully selling to a prospect are between five and 20 percent. Not very promising.
On the flip side, your existing customer base already knows, likes and trusts you enough to give you their money. That trust goes a long way. In fact, your probability of successfully selling to this group is between 60 and 70 percent, and they're also 50 percent more likely to try new products and spend 31 percent more compared to new customers. Given those figures, what impact could it have on your organization if you even diverted just 10 percent of your budget and resources towards retention strategies?
Are there untapped needs within your customer base?
When your customer acquisition strategy is stronger than your customer retention strategy, it's easy to become blind to the unmet needs of your existing customers. When you spend time nurturing your existing customer relationships, you're better positioned to identify untapped opportunities and improve your customer lifetime value (CLV).
And with greater loyalty often comes brand advocates who are willing to help promote your brand. But none of this happens unless your customers feel heard and valued.
Dig into the data to unearth gems
One of the best ways you can get to know your customers better is by digging into the data and setting up feedback loops. By looking at things like how and when customers use your product, if they use any other tools in tandem to achieve the desired outcome, or what their pain point is that triggers the need for a solution in the first place, you might uncover other spinoff products and services you could be offering, or at the very least, partnership opportunities with like-minded companies.
You might even pay attention to whether they're using your product to its full extent. If not, why? What features and functions are they not taken advantage of?
It could pinpoint an opportunity to improve or maybe customers need to be educated on how to use it. When customers derive more value out of the relationship with your brand, they're more likely to stick around and be more open to upgrades and upsells.
Another valuable tool for supporting retention is Net Promoter Score (NPS) surveys. This will allow you to see how likely your customers are to become brand advocates, as well as how well you are doing versus how well you think you are doing.
You might also pair NPS with a section for them to make suggestions or commit to regular one-on-ones with customers to discover areas for possible improvement or where they may have needs that are going unmet. Just be sure that if you're asking for feedback, you're also ready to act on it if it makes sense to do so.
Focusing on nurture and retention strategies should produce a domino effect (of the right kind) of customer satisfaction and revenue growth. Naturally, acquisition should still remain a priority, but remember growth doesn't always reside in the net new.