Happy New Year! Now that 2015 has finally hit, you’re probably busy thinking up all the ways you can boost your business over the next 365 days. For many of you, that means pursuing new leads, trying new marketing techniques, and focusing on your sales. While those things are important, you might be missing out on your biggest source of profit; your existing customers.
A recent study concluded that it’s up to seven times more expensive to attract a new customer than it is to maintain the customers you already have. On top of that, it’s 50% easier to sell products and services to your existing customers than it is to your newbies. That’s because your existing customers already know and trust you to get the job done. In fact, more than 80% of your future revenue will mostly likely come from just 20% of your existing clients.
If that wasn’t enough to convince you to focus on customer retention, consider this: the average cost of a lost customer in the United States is roughly $289. Which means that every time a disgruntled or dissatisfied customer drops your business, they’re taking $289 with them (on top of whatever loss you’ll take in revenue)–more if they happen to leave a bad review or vent about your business to their peers. Suddenly, those customers that could have been great referrals (and great referral sources) are avoiding your business at all costs.
On the other hand, a 5% increase in customer retention results in as much as a 75% increase in profitability. It all goes back to your existing customers being more willing to buy from your company, and more willing to recommend that their friends and family members do the same. I guess it’s true what they say, “a bird in the hand is worth two in the bush.” Or, in this case, “an existing customer is worth two (or ten) prospects.”
So, how do you show your existing customers that you care? The answer is simple; send out a monthly print newsletter.
I know what you’re thinking, but this isn’t just a plug to get your business. Short of inviting each and every one of your clients to Sunday dinner (which may not sit well with your spouse), sending out a monthly print newsletter is the single easiest way to stay in touch with your existing clients in between business interactions.
One of our clients recently shared a story with me that really drives this point home. When his office was suffering from an insect infestation, he called an exterminator who not only took care of the problem, but called a few days later to follow up and make sure the client was happy with the results. That client was so impressed that the next time he needed an exterminator, he knew just who to call. Unfortunately, several months had passed by then and the client couldn’t remember the exterminator’s name. That exterminator made a grave error by allowing his existing clients to lose touch. He lost what could have been a life-long client and referral source simply because he didn’t take the necessary steps to stay “top of mind.”
As I always say, people like to work with people they know and like. A monthly print newsletter will ensure that your clients know you, like you, and continue to do business with you for years to come. If you haven’t already, put “monthly newsletter” at the top of your new and improved marketing plan and prepare to kill it (as in “blow your competition out of the water, vastly improve your business, and become an entrepreneurial superhero”) in 2015!