This is a slightly adapted quote from an original I heard or read and cannot find to give it the attribution it deserves. (If anyone can find the original, please let me know)
It makes a powerful point.
Brands should place more focus on the abundance of value their existing customers can provide.
It highlights the need to balance the favour of investment in retaining and growing existing customers vs acquiring new customers.
I don’t have specific stats and facts to prove this point of view, except for the age-old quote “it costs x times more to acquire a customer than to keep one”.
(The value of keeping the right customers :Depending on which study you believe, and what industry you’re in, acquiring a new customer is anywhere from five to 25 times more expensive than retaining an existing one)
You do the maths:
Cost to acquire vs cost to retain and grow.
ROI on acquiring new customers vs ROI on retaining and growing existing customers.
First-time customers are vital for business growth.
Ok, so it’s not a binary this vs that. It’s not OR, it’s AND. Acquire and retain.
Yes, every brand needs first time customers.
The chicken(s) that lay(s) the egg(s) and so on.
A first-time customer becomes a repeat customer and with the right mix of mindset, momentum, and money, repeat customers become the asset of sustainable business growth.
Mindset
A mindset of "retain the best and grow the rest".
If you believe in customer retention and growth, then you have a strong foundation.
Momentum
Moving the needle on customer retention and growth needs momentum.
Momentum needs the people (dedicated customer retention/loyalty managers), the tools (data, loyalty program (for some), technology) and the process to maintain retention momentum (relevant customer dialogue and reporting the ROI helps in a big way).
Money
The business needs to invest and see the return on that investment for retaining and nurturing existing customers.
For many (most), a tax is a burden, a grudge, and a cost that is part of life.
If your business is spending more on customer acquisition than customer retention and growth, then the cost of acquisition is the tax you pay for NOT loving the customers you have and revealing the abundance of value they can deliver.
My leaving comment is also an adapted quote (Make new friends but keep the old)…
“Yes, acquire new but retain and nurture the old. One is silver, the other gold”
Adapted by Adam Posner
Have a happy loyalty day.
