It continues to astonish me how organizations pour money into drawing in new consumers but spend somewhat little on customer retention. Everyone recognizes it sets you back much less to maintain an existing customer than to make use of a pricey customer acquisition approach.
Why, then, exists a fascination with obtaining brand-new consumers and such little respect is given to existing customers when the price is five times a lot more? Let’s analyze the origin of this customer retention and acquisition duality.
Essentially, by Virgin’s lack of action, the business is stating “we uncommitted.” Its new customer acquisition technique is to forget its proven, devoted customers and focus exclusively on the brand-new ones. In spite of having all the information, Virgin cannot be bothered to look at it. I am sure I am a statistic someplace on gold card participant behavior. Some advertising and marketing person has actually most likely finished some fantastic discussions on whether flights are up or below last year, however in the trenches, the business does not do anything to benefit better customer retention. The adversary is always in the information. The firm has actually been spending a good deal of cash on a much better customer acquisition method, consisting of advertising to the top class; however, incorporating far better customer retention into its program has not been thought about whatsoever.
Recognizing the Need for Better Customer Retention
This is what we generally see in our interactions with organizations. The origin of customer retention is not in basic systems or in the called for advertising and marketing spend. It is the culture of the organization and the fixation with the new organisation to highlight a better customer acquisition technique. We see examples of this fascination behavior manifest itself everywhere:
– Supplying a free 800 telephone number for new sales and premium numbers for client service
– Advertising and marketing spend lavished on a customer acquisition method and not customer retention
– Secret efficiency indicators controlled by brand-new products or services in action to a newly developed customer acquisition approach
– Resourcing phone call centers to enable sales lines to be responded to rapidly, while customer support lines are addressed slowly
– Targeting provides at brand-new customers only to the detriment of the existing customer
– Creating business cultures that relax the power with sales or advertising features that deal with existing customers as 2nd course people
Ask yourself when you had a party in your workplace celebrating much better customer retention. Individuals are compensated for being brand-new clients while the existing clients are taken for provided and brushed aside Loyalty System For Ecommerce. New customers bring new possibilities and hope while the existing clients are uninteresting and mundane. We know them – existing customers also presume to whine to us. It would be excellent if you had rewarding customer who stayed with you forever; imagine the growth and the general decrease in prices. People do not assume in timescales, neither do companies believe concerning lifetime worth.