From a marketing standpoint, a current customer is a goal achieved; therefore, the acquisition of your next customer is the #1 goal, right? So shouldn’t the most important focus points for a marketing department be the expansion of the target market, generating new sales leads, and taking customers from competitors?
Not anymore.
In the age of mobile devices, the way we think about interacting with our customers has changed. The effect of customer sentiment on a business has larger implications than ever before. It is the current customer that drives every business. Marketing campaigns to acquire new users don’t work like they used to and can be wasteful, as consumers are quick to switch to a competitor for a better deal or service.
This is why it is important to invest in building relationships between your business and your current customers.
Businesses must spend time creating an engaging experience that places current customers as the highest priority, and I’ll tell you why.
Current Customers Spend More
According to research done by Localytics, the more loyal the customer, the more money that customer will spend.
What does a loyal customer mean? In mobile, loyalty is all about how often users frequent a mobile app. Developing a long-term relationship and keeping a current customer engaged are the primary methods for driving loyalty. As the number of sessions increase, so do the monetization activities. Whether it’s making an in-app purchase, buying a new outfit, or viewing more ads, growing the number of sessions leads to more revenue.
Beyond mobile apps, businesses of all kinds profit from investing in increasing customer retention rates. For example, businesses that were able to improve retention rates by 5% saw at least a 5% increase in profit and in some cases experienced profit increases up to 95%.
Current Customers Are Cheaper
Investing large amounts of time and money on acquiring users is wasteful, and one of the main reasons many companies fail. Little or no money is spent on engaging current customers, creating a high churn rate. Spending heavily to acquire users when you have a high churn rate really doesn’t make sense. Save money and focus on the customers that matter — the customers you already have.
Current Customers Recruit New Customers
Companies can spend all they want on advertisements, but word of mouth from people we trust is the best way to reach new customers.
With the power of social proof, it is more important than ever to have your current customers sharing their experiences with your company. Businesses should make it easy for customers to share stories about the company by having a presence on the major social media channels, and encouraging users to contribute and become part of the community.
Focus on the Customers You Already Have
Businesses need to concentrate on the current customer more than ever. Continuing to engage users, learn from their stories, and build relationships with them will keep them loyal and ultimately improve your product or service to more closely fit your audience’s needs. Because when your customer succeeds, your business does, too.
Check out the TUNE Blog for more articles and insights on mobile marketing, customer relationships, and how to rock partner marketing like a pro.
Author
Becky is the Senior Content Marketing Manager at TUNE. Before TUNE, she led a variety of marketing and communications projects at San Francisco startups. Becky received her bachelor's degree in English from Wake Forest University. After living nearly a decade in San Francisco and Seattle, she has returned to her home of Charleston, SC, where you can find her enjoying the sun and salt water with her family.
if it’s 6-7 times more expensive to acquire a new customer, then it’s 12-14 times harder to RE-acquire a former customer, especially in highly competitive markets. keep em happy.
Very true Travis. Once a customer walks away, it becomes even more difficult to ever get them back.
Wouldn’t both of you agree that customers generally stick with the people and companies they trust? Personal and/or company branding plays a very large role in customer retention, don’t you think?
I agree with trust. In software, I need to know my data is secure and that I’m able access it when I need to (SaaS). If that gets violated over and over, my trust is broken and I start shopping. Company brand could help retention, but only if my trust hasn’t been broken.