Know Thy Customer to Boost The Bottom Line
You’ve set your goals. You’ve outlined your objectives. Your company’s target sales goal has been identified and you’ve got a full year ahead of you to reach it. You’ve got a plan on how you’re going to get there. You’ve identified new markets to tap. You’ve got a sizzling hot marketing campaign ready to warm up some fresh leads to fill the funnel. Before you lunge full steam ahead, let’s talk about an important target market you may be overlooking: your existing clients.
According to some reports, it can cost up to 7 times more to acquire a new customer than to retain an existing one. That’s not news. Business experts have been telling us that for years. You know that and you’re making efforts to bolster customer loyalty and improve retention to nurture those relationships. You just want to expand your sales and for that, you need new clients, right? Yes, but that’s not all.
Where the Sales Are
Let’s be clear. Expanding our market by attracting new customers is never a bad thing. When we’re talking about where we focus our budgets and efforts, however, don’t overlook the value of your existing customer base. Did you know that you’ve got a 60-70% chance of selling a product or service to an existing customer compared to a 5-20% chance to closing the deal with a new one? Wait, there’s more. Existing loyal customers spend more than twice as much per sale than new ones. They’re also more likely to try new products.
Word of Mouth
Here’s another stat you can’t afford to ignore. Nearly three quarters of consumers say they will recommend a company or product to others following a good experience. Couple that with this stat from a recent RewardStream survey: 93% of consumers indicate word of mouth influences their purchasing decision. The survey also suggests that more than half of those polled make purchases based on recommendations while only 6% rarely use referrals when making purchasing decisions. Here’s what that means for you: if they’re happy, your customers will talk you up and their friends and family will seek you out.
It's Not Just What, it’s How
Sure. What you’ve got to sell matters. If you don’t have the goods and services someone wants or needs, they aren’t going to make a purchase. However, customer experience matters. A survey conducted by Microsoft found that 97% of global consumers rate customer service as very important or somewhat important. The Aspect Consumer Experience Survey found that 76% of consumers credit customer service as the true measure of how much a company values them.
We can go on and on with these numbers from various surveys and studies. The point is this, customers don’t just care about what you’re selling them. They care about how you’re treating them. (And again, they’ll tell their friends and family about it, too, which will influence the decisions those potential new customers make about doing business with you.)
Know Your Customer
We’ve got one more stat for you. According to Jim Barnes, author of Secrets of CRM, only 4% of dissatisfied customers will speak up and tell you they’re dissatisfied. The rest will just leave. Don’t assume you know what your customer wants or how they’re feeling about your business. Invest in opportunities to ask them. From the more strategic A/B testing to surveys to customer reviews to “listening” what folks are saying about you online, be listening and engaging your clients to better understand how you’re doing.
Get Friendly With Analytics
If you’re not embracing digital marketing and sales tools, you’re missing out. These tools aren’t just new vehicles to splash around a little advertising. They yield a treasure trove of data that can help you better understand who your customer is and what makes them tick. You can use that data to help inform future loyalty campaigns and deals. You can tailor your messaging to fine-tuned market segments, speaking directly to a specific need in a more meaningful way. You can detect patterns in customer behaviors that allow you to address potential concerns before they’re bigger problems or to adjust inventory and resources to have more of a good thing available to meet upcoming demand.
