The 5 Reasons–Why Customer Retention is Important
Do you know that it costs up to 5x more to acquire a new customer than to retain an existing one? This is one of the many reasons you'd give some eyes and ears to your existing customers. Keeping your current customers happy and engaged can reduce churn rates and keep your business growing (which is what matters the most).
This blog will explore the five reasons to convince you that customer retention is crucial for your business to keep reaping.
Why is it so Important?
Retaining a Customer is Easier
If you can spend less and get more or spend hefty and get less, what would you choose? The former option? Right. It's the same case here. Keeping a customer is five times less costly than getting a new one.
So, you can spend less and get more. Here is another win-win–your current customer has a double probability of buying from you than a new customer. So, giving attention to your existing customers won't be a bad decision but a more profitable one.
Increased ROI
You can get maximum ROI from current customers. The statistics show that only 5% of customer retention can boost your business revenue to 25-95%, depending upon what incentives you are giving to the customer to come back.
For this, decide who are the right customers and give them irresistible benefits to retain them.
Double Income Streams
New customers can bring in revenue, but who doesn't want another steady income stream. A stream that costs you five times less—your regular shoppers.
The customers have twice the tendency to buy from you. They are going to contribute a lot to your revenue. So, it's a good idea to make them happy and engage with them to keep them visiting your store or choosing your service season in and out.
Get Higher Returns
The CLV of your patrons is on the higher side than new customers. What is CLV, though? CLV (Customer Lifetime Value) is the value that a customer can spend with your business in their lifetime.
Your long-term clients can give you a high return when they need your product or service more often. Keeping them is always a high win bet.
Boost through Referrals
Nothing is more valuable in your business than loyal customers. It's a bitter truth that your business can't thrive in the long run if you don't have loyal customers.
The ones who trust you. The ones who by words of mouth can refer to their friends & family your product or service giving a passive push to your revenue. The tip here is don't lose them. If you lose them, you'll lose many more.
It is evident that retaining customers is important for any business. Not only is it easier to keep a customer than acquire a new one, but you also increase your ROI and can create two income streams.
With the right retention strategy ready, you can get higher returns from your current customer base. So what are you waiting for? Let Tectanic help you develop an expert plan to retain your high-value customers and boost your bottom line.
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