Written by: admin on May 10, 2013 @ 6:15 pm
The bulk of marketing budgets is often reserved for acquiring new customers. Much energy, time, and money is spent pursuing prospects that have a marginally small chance of ever becoming a customer. There’s a flaw with this strategy.
The simplest and most effective way to boost your bottom line profits is to remember who brought you where you are today: your existing customers. If you aren’t consistently advertising and staying in touch with current and past clients, you’re missing out on the best way to continually grow your business.
For every month that goes by without making contact with your past and existing customer base, you’ll lose up to ten percent of the clients you’ve worked so hard to acquire. Retaining clients is therefore an extremely important business growth strategy.
Selling your services to new customers means earning their trust. It takes hard work to build this trust. When a prospect becomes a customer, you have only begun to earn their trust. You cannot expect to maintain that trust without consistent, frequent contact that adds some value for the customer.
One of the best ways to maintain and build that trust is to communicate regularly via a newsletter. An effective newsletter has a mix of about 80% infotainment (fun and informative content that may not have anything to do with your particular industry) and 20% information about your business or industry.
The recent trend of companies switching to all digital email newsletters is now reversing with the realization that actually getting the emails opened and read is far more difficult than many were led to believe. Also many survey respondents favor a printed newsletter that they can hold versus one more email that clutters their already overfilled inbox.
Sure, email newsletters are inexpensive and require no postage, but there is a cost involved when the recipients never see or open the messages. By contrast, a printed newsletter is still one of the most powerful and cost-effective ways to stay in front of your customers without overtly selling them.
The Lifetime Value of a Client
Perhaps one of the reasons past clients are ignored is because some business owners don’t really know the lifetime value of a client. An existing client who is treated right, is not ignored, and is communicated with on a regular basis will not only return to do more business themselves but will also refer your company to those around them. Therefore the actual lifetime value is often five, ten, twenty (or even more) times the value of an initial sale.
That’s the power of relationship marketing and the reason why your existing customers should get the bulk of your marketing budget. If you treat your existing customers well and communicate with them on a regular basis, you may not need to chase as many prospects as you have in the past.
To learn more about defining and understanding your lifetime customer value, please visit: http://hbsp.harvard.edu/multimedia/flashtools/cltv/ (requires Flash).
