There was an interesting and timely article in NewBusiness magazine this week on the importance of looking after existing customers, especially in a downturn.
Why it pays to reward your customers
"...by far the most vital [lesson] is making sure that customers remain happy.
The logic for this is unassailable. Marketing people will tell you it costs anything from five to seven times more to gain a new customer than keep an existing one. According to some, reducing customer defections by as little as 5% can result in a profits increase of between 25% and 125%.
As ever, it takes a major downturn like this one to remind all businesses of the importance of caring for current relationships and keeping customers loyal. Difficult times are already probably forcing your customers to reduce expenditure and look at ways they can save. Creating a solid, trusting relationship with them can reduce the chances of your company being first on the list of cutbacks."
I've seen stats that show 70% of lapsed clients leave because of lack of attention and communication rather than poor products or service - they just felt ignored. A PR friend of mine has just done a survey which shows that figure may actually be as high as 85%.
The reason is that many businesses concentrate mainly on making a quick sale from new customers, and very quickly come to take existing customers for granted. They forget that their competitors will be trying as hard as they themselves once did to woo that customer, yet your existing customers can be your richest source of future profit.
Showing that you value your customers is easy by sending an email or printed newsletter with articles on how to get the best out of their purchase. Maybe you also offer different products that would add value to their lives in the same way the first product did. It shows you are thinking about them and care about keeping them as a happy customer - an attitude that can prove to be extremely rewarding... as well as profitable!
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