3 Reasons to Care About Customer Loyalty

When it comes to boosting revenues, many companies focus on acquiring new customers. In fact, according to Econsultancy’s “Cross-Channel Marketing Report 2014,” 44% of marketers are placing a greater focus on customer acquisition than customer retention. Only 18% are focusing more on customer retention. However, focusing on acquisition to the exclusion of customer retention may not be the best strategy. Here’s why:
1. The 80-20 rule applies in marketing, too. Research shows that 80% of a company’s revenues come from 20% of its customers. These 20% love your brand and find value in a relationship with your company. Identifying and courting those customers can be enormously profitable.
2. The chances of making a sale to a new customer ranges from 5–20%, according to Marketing Metrics. By contrast, the likelihood of selling to an existing customer jumps to 60–70%. Your existing customers can be your most lucrative. You want to keep them.
3. According to Peppers & Rogers, it can cost up to seven times more to acquire a new customer than to keep an existing one. For this reason, it can take up to one full year before a new customer becomes profitable. Once you’ve acquired those new customers, you need to keep them.  On board with customer retention?

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