Have you ever thought about which one is more important for your business: new customer acquisition or retention of the one that you already have?
We all are aware of the fact, that acquiring new customers is one of the most important criteria for any business.Acquiring new customers costs 5 times more than retaining their existing ones. Click To Tweet
However, this must also be remembered that retaining your present and old customers is also critically important if you are running a subscription-based business (like cloud based CRM software) or have repeat customers.
Hence, we can see both acquiring fresh customers and retaining the existing ones are equally important for the growth of any company.
Nevertheless, it is really a big question for many as to how do they know which one to focus more on customer acquisition or retention when forming the strategies needed to boost their business growth.
Now, the answer to this question is subjective, and highly complicated, as it involves several variables like your long-term business goals, customer acquisition cost, your business model, and so on.
Hence to answer this complex topic, whereby we need to consider several things, let us dig into the topic and shed some light, as to which is the right strategy for your company based on the business model you work on.
Basic of Customer Acquisition
So let us start with the obvious. It is no brainer that you just cannot run a successful business without winning fresh customers, which is particularly true for small businesses and startups.
Now, acquiring the first few customers does always seem to be a monumental up-hill task when you start your business. Since building your brand reputation can be most difficult without any customers.
Mostly the first customers for any business come from the existing contracts of the company and its stakeholders in the business. However, as your business evolves acquiring new customers becomes exponentially easier, since an increase in brand awareness helps in growing your customer base.
Nevertheless, how you approach your sales strategy for customer growth largely depends on your business goals.
Therefore, let us now look into how you can develop the right sales strategy for your business to find customer growth.
Potential Pitfalls of Customer Acquisition
Although it has been agreed that your business needs new customers and hence the sales pipeline in your best CRM software should never remain empty, nevertheless, several organizations make the blunder of devoting too many resources for customer acquisition and not enough staffs for retaining them, since they remain confused about understanding whether customer acquisition or retention which should supersede the other as their goal.
Therefore, customer churn is an obvious phenomenon that happens when you acquire a new customer but do not take the appropriate measures to ensure that your customer is happy using your offerings, which results in losing them quickly.
Therefore, the key to keeping your customers happy is to provide a world-class customer experience (CX) right from the very beginning after your sale that in turn boosts customer satisfaction and renewal rates.
According to a survey done by Invesp, acquiring fresh customers in most businesses costs 5 times more than retaining their existing ones.
Therefore, when you win over a fresh customer, there is your chance to solidify their trust in your businesses’ ability to support them successfully.
Never sign in a new customer and then leave them to fend for themselves on their own, for if you do this you will surely dissatisfy the customers, who will most likely leave your brand for competition.
Hence while you onboard a new customer, ensure that you also provide high-quality training to the customer to increase their customer satisfaction which will eventually make the customer stay for long with your brand.
The Basics Of Customer Retention
Retaining your existing customers is not always as difficult as it seems.
This often-overlooked factor in business which determines the success and failure of your brand can be easily done by delivering a world-class customer experience that you can do simply by delighting your customers.
Here are some basic tips as to how you can retain your customers for long:
Now, this is only a partial list of many other things that you can do to keep your customers loyal and satisfied with your brand so that they stick around and provide recurring revenue for your business.
To be truthful there is really no drawbacks focusing on customer retention, as there are a plethora of statistics that back this up which even hints at your business growth:
Food for thoughts:
Would you rather have 50 new customers each year that leaves after that year or just 15 customers that stick with you for a decade?
Well, the answer seems to be pretty obvious.
Talking about customer acquisition or retention, new customers eat up more resources and administration costs, and they also do not produce enough revenue for your company.
On the other hand, a loyal and happy existing customer who remains with your business over the long haul not only allows you to predict your businesses’ future revenue more accurately but also provides you the peace of your mind.
Therefore, the future of all successful businesses remains with maintaining a high level of customer satisfaction using the best small business CRM software if they are a growing startup. Since doing so naturally results in a higher level of customer retention and helps in creating brand advocates that ultimately can do wonders for your brand reputation management efforts.
According to a report published by Corporate Visions, more than 80% of businesses spend more than 70% on their marketing budgets for acquiring new customers and unfortunately even lesser than 30% on customer retention initiatives.
Therefore, to conclude on this topic it is recommended that as a modern business organization using Salesforce Alternative CRM software like ConvergeHub for managing the relationship with your customers you should at least spend 50% of your marketing budgets on strategies and processes for retaining your customers since it is one of the best tactics for ensuring long-term business growth.