Customer Retention Strategies Customer retention is a cost effective and profitable strategy In fact

Customer Retention Strategies

Customer retention is a cost
effective and profitable strategy In fact, research has discovered:

Repeat customers spend 33% more
than new customers

Referrals among repeat customers
are 107% greater than non-customers

It costs six times more to sell
something to a prospect than to sell that same thing to a customer

Given these numbers, wouldn’t it
seem logical for most companies to spend most of their marketing dollars on
customer retention and repeat customers? Yet, that doesn’t seem to be the case
with many companies It seems most marketing and sales campaigns are designed
for the new customer

A major pet peeve of mine is
wireless telephone companies New customers who sign a new contract are given a
large rebate or even a free cellular telephone; yet current customers whose
contracts have not expired have the privilege of paying full price for new
phones This seems like a formula for value migration and is a factor in the
intense rivalry between the major players in the industry

QUESTION:

Shouldn’t we rethink our marketing
and sales strategies given the persuasive research that finds it’s five times
more profitable to spend marketing and advertising dollars to retain current
customers than it is to acquire new customers?

Do you feel it isn’t happening as
much as it could or should? Why or why not?

How does your company approach
this issue?