I'm going to get thousands of new customers!
No, you're not. Okay, some of you will, but let's just quit that notion right now.
When you ask a merchant what they're top 3 priorities are, it's more customers, more customers, and more customers. The next 3 are more revenue, more revenue, and more revenue which is essentially the same thing. You can be sure that we at HeyNearby want the same for all of our merchants - new customers and more revenue - but most businesses spend a disproportionate amount of time and marketing dollars in pursuit of new customers to the exclusion of past customers.
The first order of business is to retain the customers you already have. The cost to acquire a new customer often runs 6-7 times higher than the cost to re-engage a past customer (1). Those past customers have already declared themselves your target and you've already spent money acquiring them through promotions, Google ads, print campaigns, and more. And they've already bought from you! And they will spend more than your new customers the longer you maintain your relationship with them (2). Higher transactions coupled with lower marketing costs/effort lead to even better profitability for your business.
What does it take to retain your customers?
- Stay in front of them. That could be occasional emails, social media, or lightweight messaging blasts.
- Reward them for their loyalty. Special offers and events confer an informal membership. Punch cards and frequent buyer programs cultivate repeat visits.
- It's all about customer service. 70% of buying experiences are based on how the customer feels they are being treated (3).
A new customer is great, but a returning customer is even more valuable so be sure to adjust your marketing efforts accordingly.
1. White House Office of Consumer Affairs
2. Emmett C. Murphy and Mark A. Murphy, Leading on the Edge of Chaos, Prentice Hall 2002
3. McKinsey study