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New Clients vs Old Ones: The Real Revenue Drivers

Customer acquisition is key for any business today. Acquiring new clients is the main priority when it comes to increasing revenue. Much of this process consists of paid marketing initiatives that may result in substantial costs for your business. In the past 5 years only, the costs of acquiring new customers have increased by up to 50%.  

You obviously want new clients, but what do you do if you’ve used up all your resources? 

Well… You turn back to your previous clients. They are a much more accessible source of revenue. Don’t forget! They once believed in your brand and it’s up to you to keep them faithful. This is what customer retention is about, nurturing the relationship you have with your loyal clients.

Why is it so important? 

Many businesses find themselves spending a lot on customer acquisition and they forget all about retaining their old, loyal customers. That’s a big mistake since previous clients are often much more valuable. Selling to customers you already have a relationship with, is a much more effective strategy for increasing revenue. Studies show that the probability of selling to an existing customer is 60 – 70%, while the probability of selling to a new client is only 5-20%. 

Think of it this way, when you are successfully acquiring new clients, you basically succeed at convincing them to buy your product. In order to convert them, you need to invest time and resources so that they can get familiar with your brand and develop trust in it. This is one of the most complicated processes for any business today. 

Now think about your past clients. They have already been converted and they are already loyal to your brand. Right off the bat, half of that complicated process is already taken care of. Moreover, if your previous customers were pleased with your services, they won’t bother searching for a different option since this also costs them time and resources. As a result, in such a situation, it’s easy for your loyal customers to pick you over your competition.

With the above points in mind, here are three tips that can help you better retain your new clients and increase your revenue as a result. 

1. Onboard! 

Customer onboarding refers to the process of introducing new clients to your products or services once they have been converted. An onboarding program is a great tool you can use to create an experience for your new clients rather than just sell them a service or product. 

Some of your clients might not know exactly what they are looking for or how to use your product even if they decide to go with your brand. In this case, it’s your responsibility to educate them if you want to keep them coming back. Keep in mind that customers can still abandon your product or service even after purchase. Many clients do this if their experience with your brand does not meet their expectations.

As an example, let’s say your company is selling data collection software. Your client knows nothing about data collection, but he knows he needs the numbers to make sure his business is on the right track. If this is the case, make sure to train your customer on how to use the software after you sell it to him. Offer a few training sessions or at least provide him with a guide on how to use your product. 

In addition, bear in mind that different customers have different needs. Stay relevant and customize your onboarding programs according to their individual needs. Take an interest in their history, in their values, study their industry and most importantly, don’t be afraid to ask questions. Better communication means a better business relationship. 

Using this approach will let your customers know that you are committed to a long business partnership and that you consider them valuable clients. 

2. Keep them loyal

Loyalty programs are also great tools you can use to engage your previous clients. Such programs are designed to encourage your clients to stay loyal to your brand by offering various features and reward-schemes. Here is a core example: it’s a common practice to offer discounts to returning clients based on the history they have with your brand. Loyalty programs as such have been around for decades and they have proved their value time and time again. 

To find out what type of loyalty program works best for your clients, you need to clearly define the relationship you have with them. Here are some questions you can ask yourself to help you make the right call: 

  • Which of my clients brings the most revenue to my business? 
  • What is the lifetime value of my customers? 
  • How much would each loyalty program cost me? 
  • Which would be the most effective? 

Finally, as mentioned before, each client has individual needs. Once you have decided on which loyalty program works for your brand, you can add even more value by customising it for each of your clients. This might take a bit of effort, but it will show your customer that you truly value him. 

3. Stay in touch even if your business is concluded

Everything comes to an end and that applies to business partnerships as well. Let’s say you worked with one of your customers for over 10 years, but he decides to close his business and move to a different field. Even if your business partnership is concluded, you can still connect with him on a personal level. 

Kindly send him a message from time to time to check on what he has been up to. Wish him a happy birthday when the time comes. Send him a bottle of wine for Christmas and congratulate his daughter if she graduated high school. Even if you don’t get a response, it doesn’t take much effort to write a message.

By maintaining a personal relationship with your past clients, they will clearly see that your relationship was not only about money but more about a human connection. 

Conclusion

Old clients can bring much more value to your brand as opposed to new ones. That’s why customer retention is essential. Make sure to use the tips above the next time you acquire new clients. If you build a relationship that goes beyond business, it will be much easier for you to retain them. Maybe your competition does a better job than you, but if you have a true connection with your customer, this won’t even matter. You have worked together in the past and so your clients know what to expect from you. They know you care.

Since this is a truly important topic and we want the best content for our audience, we have more tips for you on how to create a meaningful relationship with your clients. Stay tuned for our next article to find out what is the key to building a long-lasting relationship with your customers. 

It’s also helpful to partner with a team that cares about developing a long-lasting partnership suited to your particular needs. This way, you can trust your marketing to capable hands and focus on what you do best; creating solutions. If you’re ready to build a community around your brand, contact us for a discovery session to help you make the most informed decisions for your business.