I have recently read a post on the Econsultancy about customer lifetime value.
I think it is the Elephant in the room that organisations spend time and money to develop new marketing campaigns but forget that they already have a target audience to market toward.
This post by Graham Charlton highlights that time, money and resource can be saved if you look after your existing customers and apply part of your marketing budget to retain or encourage repeat customers.
Below if a breakdown of ways you can ensure repeat business and save costs finding new customers:
If you offer quality products or services, customer satisfaction is likely to be high. Take a car MOT as an example- you do not remember how much you paid for this last year. You do, however, remember if the quality of service was good and if you would like to return to that business.
To ensure people keep coming back. You need the service and delivery to be consistent. This means making sure your staff are well trained with the organisations values and belief systems and ensuring all staff are ‘on the same page’.
Value is not the same thing as cheap. Nobody likes to feel they have over paid for something. If you offer the two points above- consistency and quality- most customers will go away feeling they have experienced something of value.
Customers like to feel valued as well as having something of value. Personalisation is a great way to retain customers.
When was the last time your hair dresser sent you a personal email or letter and used your name?
When was the last time you received a letter addressed ‘to the home owner’ and threw it straight in the bin?
- Cross sell or up sell
You have the customer in front of you- what else might they be interested in? This links with the added value point above. Fast food restaurants do this very well with with meal deals or adding a small amount of money for a larger meal. E.g. ‘Just 30p more to go large’! This is an extra 30p in the companies pockets.
- Loyalty model or subscriptions
If they have had a great experience- let them subscribe to updates- it may pay off in additional sales. A loyalty model also offers added value with, the more they purchase, the more they save.
A good friend of mine owns her own business, Beauty by Charlene. She does not want new customers.
Take a moment to let that sink in…
Her business in massively successful because she has a strong group of loyal, regular customers. She doesn’t need to invest in marketing because she is already turning new clients away through word of mouth.
Many small to medium businesses work in this way. They do not want to expand or develop but want to sustain and maintain their business to keep the work/ life balance.
If larger organisations can learn from this and maintain customers, their marketing budgets will shrink, brand loyalty will increase and sales will continue to rise.