In the business world, forming lasting customer relationships is critical to success. Building a long-term relationship with a customer is far more profitable than acquiring a new customer. Consider these stats:
- It costs 6-7 times as much to acquire a new customer than retain an existing one. (Client Heartbeat)
- On average, loyal customers are worth up to 10 times as much as their first purchase. (SalesForce Desk)
- The probability of selling to an existing consumer is 60-70%. The probability of selling to a new prospect is 5-20%. (Client Heartbeat)
- A 10% increase in customer retention level results in a 30% increase in the value of the company. (Bain & Co)
So selling to a current customer is cheaper, easier, and more profitable in the long-term. Think about old school selling. Before big grocery chains, a consumer might shop at the same corner store where the shop owner knows all his customers by name. Personal relationships drove customers to continue businesses with that brand. Building a personal relationship with a consumer can improve their experience, and 55% of consumers would pay more for a better customer experience. (Defaqto Research)
Since the technology boom, business has become less personal. But even today, personal relationships drive a lot of business. People are more likely to buy from brands they like and trust. Consumers still tend to make purchase decisions based upon emotion and justify it with logic and facts. This is why loyal customers are worth so much more than new customers. Doing business with a customer is a journey; it requires continued engagement throughout the relationship.
Nurturing doesn’t stop after lead acquisition! Build relationships and stay engaged with customers who have bought from you in the past. For more information on engagement and the customer journey, check out Marketing Content Strategy: The Lifecycle Journey.