Did you know that it costs 6-7-times more to get a new customer than retain one? It sounds unreal, but it’s true. The cost of acquiring new customers in today’s competitive market is extremely high to the extent that businesses are better off committing resources to retention campaigns. Some statistics even show that whereas you’re 60-70% likely to see a repeat purchase from existing customers, there’s only a 20-30% chance of selling to a new customer.
Ultimately, most businesses survive on purchases from a small group of loyal customers. According to Marketing Insights, 80% of a business’s profits come from 20% of the company’s existing customers.
Signal Mind delves deeper into these stats to help SMBs understand the value of customer retention and, after that, offers several tips to boost customer loyalty. The following are a few key takeaways from the blog.
Acquiring New Customers vs. Retaining
- The average conversion rate from promotions sent to new customers is less than 1%.
- Loyal customers are worth up to 10 times more than their first purchase, on average.
- Retaining just 5% of your customers can increase your profitability by more than 25%.
- A 10% rise in customer retention can yield a 30% increase in company value.
Check out the Signal Mind blog to learn more about customer acquisition vs. retention costs and the benefits of building a robust customer loyalty program.