Retaining vs. Prospecting Customers

Most marketing plans focus on prospecting. Business owners tend to use marketing channels to deliver messages they hope will drive new business. Generating new customers is key to a company’s success. But it is important to remember that keeping your current customers happy is even more crucial – not to mention more profitable.

In fact, acquiring new customers generally costs 5 to 10 times more than maintaining existing ones.  By investing marketing dollars in retaining current customers you are more cost effective with your budget and can yield a higher ROI.

Why? Current customers are already invested in your brand. You’ve captured their attention, motivated them to purchase your product or service. You’re already positioned first and foremost in their minds, making your business the go-to source for next time – as long as they are satisfied with the experience. Loyal, happy customers can even lead to generating new customers at almost no cost to you. They are more likely to refer you to others and provide third party endorsements, whether through word of mouth, blogging, positive reviews or tweeting. In today’s social media world, satisfied customers are even more valuable and important for companies. The best marketing strategies reflect this by attacking both challenges: prospecting and retaining.
How does your business retain customers?

Photo Credit: vitorcastillo