Past Customers Are Worth Their Weight in Gold
It’s surprising to hear how many businesses neglect what in our opinion is their deepest pot of gold… past customers! It’s far too common to see a business that is lacking traffic throw money at advertising to new customers instead of turning to the ones they already have! Study after study shows that the majority of business revenue comes from returning customers.
“How,” you say?
Statistics show that an emphasis on building a relationship with your customers can increase revenue in at least three ways:
- Increase revenue by bringing past customers back. We’ve heard it before and its almost cliché, but “It’s easier to get an old customer to return than to bring a new customer in for the first ime.” Then why do most businesses continue to neglect past customers? These are people that have already learned the route to your business, know the service they’ve received, the quality your product, and more. However, it’s all too common to see the average business devote little or no effort into keeping in contact with past customers, yet will concentrate most of their resources trying to bring in new ones. Create that plan and you’ll be surprised to see how much revenue can come from returning customers.
- Find new customers by using your network of existing customers. Have you ever seen a movie or tried a new restaurant based on a friend’s suggestion? It happens ALL THE TIME. Encouraging your past customers to spread the good word can go a long way for your business. While the quality of your service is a big deal, why not build promotions to help existing customers bring in new friends? Assuming you’ve already started tracking customer data, send a text message to all of your past customers, including an incentive to bring in someone that is not in your database. You’ll soon see the power of utilizing your past customers.
- Use your existing customers to decrease your marketing costs. I like to think of marketing channels as a series of rental networks – if you want put your business in front of their network you have to pay the high cost to rent them. Businesses who capture customer data have the benefit of using their own network instead of renting others. They decide how, when, and what to promote to their network. Take away the dependency on other marketing networks and start building your own!
It’s easy to throw money away marketing to new customers; but before you do, try the strategy that is giving many companies the edge over their competitors. Try reaching out to your customers and you may find that they are worth their weight in gold.
Stay tuned for more tips and tricks to pull revenue from past customers.