Is your revenue strategy focused on acquiring new customers more than retaining existing ones? If yes, then you are among 63% retailer who consider customer acquisition to be the most important marketing goal where as successful companies know that retaining their loyal customers is much more important for both revenue and marketing. How?
- More Sales and Visits:Â A recent survey was made onÂ 2000 businesses having different loyalty programs that constitutes 14 million store visits from more than 1 million customers. The study found that loyal customers (those who visited stores at least 10 times) account for about 20% of the total customers. Too low? Guess what! That 20% drives 80% of the total revenue and 72% of total visits as well.
- Spreading the word:Â One of the most influential element driving purchase decisions in retail world today is the word of mouth. Yes it really is and 55% of consumers recommend a store because of its customer service. Also, loyal customers with loyalty cards/membership are 70% more likely to spread the word about your business.
- Upselling:Â The probability of making an additional sale or up-selling to loyal customers is 60Â -70%. Compared with loyal customers, new ones are more price-conscious. The chances of getting a sale from a new person is 5 to 20%. And actual sales from promotions sent to them is less than 1%.
In other words, loyal customers are worth more. They spend more money, more frequently and cost about 7-10 times less to keep than it does to acquire a new customer. Thus forming a loyal customer base makes good business sense and should be an integral part of any retailerâ€