Resell, Don’t Sell!

17 Jul 2017 11:22 AM By Paul

Four compelling reasons why existing customers are a more lucrative target group than new customers

What is the biggest strength of a marketer? Without a doubt, it’s the ability to understand the needs of a prospective customer and fulfill them seamlessly. As a good marketer then you likely have a pool of customers whose needs you’ve understood, and delivered to. That, right there, is your ideal prospect. You’ve already converted them; now see what else you can do for them.

Very often, an existing customer has purchased only one of your products or services. Chances are they don’t know what more you can offer. Nobody is actively looking for ways to spend money! When marketing your products and services to your existing customers, who likely already believe in you, you could boost your sales exponentially. Even a 5% increase in customer retention can lead to a 25% rise in profitability.1

Here’s why we advise you concentrate a significant portion 

of your marketing efforts on existing customers.

#1 - Cost of retention versus cost of acquisition

    While gaining new customers could be extremely motivating, nurturing your brand’s relationship with existing customers is far more financially rewarding. Studies reveal that the cost of retaining existing customers can be up to seven times lower than the cost of acquiring new customers.2 Marketing to existing customers reduces costs by eliminating a significant chunk of business development expenses.

    #2 - Reduced marketing efforts

    As your existing customers have already experienced your brand, your team must devise strategies to build the loyalty of these customers to promote repeated purchases. This can be done by using targeted strategies such as loyalty cards, direct mail and subscriptions much of which also lend themselves well to automation.

    #3 - Clearly defined target customers = more effective communication

      When your business is frequented by the same set of customers, you can make fairly specific inferences about the groups of people that you cater to. This will help you customize your marketing to deliver exactly the kind of messaging customers would like to hear at different points of the in their purchasing cycle. You can then employ automated stay-in-touch strategies using the segmentation of existing customers within your CRM, which is automatically two-way synced with the mass emailing automation process. Smart automation would intuitively send the first email in a series to a new customer while sending the 55th email within the series to a different customer who might’ve been around for a while.

      #4 - Word of mouth publicity

        A happy customer is a brand ambassador for your business. When you know what they have previously purchased and offer them other relevant products and services that might be useful, they consider your cross-selling and up-selling efforts good customer care. This leads to customer delight. A loyal customer refers 50% more people than one-time buyers.3

        To get the most out of your existing pool of customers, you need to understand their needs, preferably in real time. CRM software helps you do just that. It streamlines customer services, organizes information flows and helps you closely monitor the pulse of your consumer. Find out how a cloud-based CRM can help your team work smarter and improve customer retention. Our training can help you get the most out of your CRM platform.