Executive insight from Reward Paths
It’s generally understood that whomever first penned the proverb “A bird in the hand is worth two in the bush” was talking about falconry; but we reckon they could just as easily have been talking about customer retention.
Another version of the saying would go something like this; “A customer in the hand can grow your business for a fraction of the cost of searching for new ones.” Less catchy, but entirely accurate.
In fact, data shows that the cost of acquiring a new client today can cost up to five times that of holding on to an existing one and, as we navigate inflation and threats of an imminent recession, we’d hazard a guess that most business owners would prefer to be as efficient as possible when growing their profits.
The good news is that by looking after your existing customers, you achieve this elusive marketing efficiency. Research by Frederick Reichheld of Bain & Company shows that increasing customer retention rates by just 5%, can help a company increase its profits by anything from 25% to 95%.
You may feel as though you have heard the pleas to give priority to and invest in existing customers before. Shouldn’t this be a message that marketers understand very well? Probably so, but what is often lacking is not just the “why” of customer retention but the “how.”
This article, provided by Reward Paths, digs in to the top three “whys” of customer retention but goes further to tackle the “hows” of the challenge. In this challenging and uncertain economic environment, it’s important to have a roadmap, a field guide, to help you organize practical solutions that work to improve customer retention and improve profits.
Read this article to get the full story.
