How a loyalty program can lower your customer retention costs?
Growing a stable and strong customer base is important to businesses. According to some sources it costs a business about five to 10 times more to acquire a new customer than it does to sell to an existing one. Not only that, but on average, current customers spend 67% more than new customers. The difference in the cost of customer acquisition and customer retention is clearly very different and something business owners shouldn’t ignore. The average business loses around 20 percent of its customers annually simply by failing to attend to customer relationships.
The cost to businesses of ignoring their current customers is a masked risk with many businesses not putting together a strong strategy for customer retention. Although, building a strategy is only half the battle, businesses need to tap into what their current customer like and how this can be utilised in growth initiatives. The benefits of customer retention accumulate over time resulting in an avenue for long-term business growth making it well worth a thought when planning ahead.
There is more than one way to approach customer retention with the most effective being an inspiring customer loyalty program or brand loyalty initiative. It makes sense to retain current customers and reward them for being loyal to your business. Loyalty encourages customer to get to know your business and build a good relationship with your brand. Using a loyalty program is a mutually beneficial relationship with businesses lowering their marketing cost per sale and customers being rewarded for products and services they enjoy. The overall aim is having a high retention rate securing long term custom. It’s a win-win situation for businesses that rely on return custom for a large chunk of their revenue. If a business gets customer retention right, then they can focus on other matters knowing that they have a happy customer base.