While every business owner understands the value of an established customer, few make deliberate efforts to retain such customers. In fact, most companies will spend vast amounts of money trying to acquire new customers without paying attention to existing customers. The business owners who fail to take care of existing customers normally assume that they have already captured the old customer and do not therefore need to spend time and money cultivating loyalty. This, however, is actually wrong. The old customer needs more attention than a new one and every company should have a customer retention plan in place.
Why old customers are critical for any business
Most businesses depend on their old customers. A company that has a group of repeat customers will be miles ahead of one that depends on new ones. Losing an old customer could therefore be unbearable for your business.
For starters, the cost of acquiring a new customer is many times higher than the cost of retaining an old one. Secondly, a first-time customer is most likely to only make a trial purchase – since he or she has not experienced your products or services before, the amount the customer spends will be limited. If the customer then gets a great experience, he or she will come back and make an even bigger purchase.
Research has also shown that close to 90% of customers never come back if their first experience is unsatisfactory. Not only do such customers give your business a wide berth, they are also likely to share their horrible experiences with friends and this will also make you lose many more potential customers.