The Leaky Bucket - Are you screaming whilst you chase the Dream?
by David Dwyer on 16/09/2019 622 Reads
Acquiring new customers can be difficult, but engagement can help
It’s well known that acquiring new online repeat purchase customers costs considerably more than retaining your existing ones.
What’s not so well known is the sheer scale of retention cost savings and also the additional revenues that looking after and retaining your customers can deliver.
We’re talking big numbers, for example, according to Forbes, it costs FIVE times more to attract a new customer than to keep an existing one. Signalmind put that cost even higher, between six and seven times. Whatever the true significant additional cost it’s something of a mystery as to why more than twice as many companies (44%) focus on customer acquisition rather than retention (18%).
We’re not the first to recognise this and there are plenty of other articles out there that cover similar topic. One of the best is from Neil Patel who talks about Customer Acquisition Cost and compares that with Customer Lifetime Value (CLV) the value in retaining clients quickly start to become even more vivid.
He uses an example of a CRM SaaS company able to turn a $2.00 investment into $2,000 of revenue (CLV). This is “both attractive to investors and a signal to the marketing team that an effective system is in place” he says.
Of course he’s right. Happy, long term customers make for happy, profitable businesses over the long term.
Which begs the question, "what do I need to do to keep my customers happy?"
The answer is simpler than you might imagine. You look after them. And you look after them very, very well indeed. Exceptional customer service shouldn’t just be an aspiration for your business it should be baked in - a core component of your culture, your ethos, your delivery. For more Insight on Customer Service read this 2015 insight on "Fair Process, in an unfair World - Has the Web Lost its soul".
Anything less and you’ll shed hard won customers - expensively.
Are you wasting money chasing new clients?
A recent Econsultancy and Adobe Digital Trends report, in which they quizzed B2B businesses as to what they believed to be the single most exciting opportunity for 2020 the answer was clear CX (Customer experience).
Whereas in the past you might have expected quality to lead the way the results of the survey showed clearly that these days it’s all about a “fair service”. Ahead of tactical opportunities such as social media or content and video marketing the single most valuable opportunity for any business lies in the essential interaction between you and your clients - CX (Customer experience).
CX is evolving - are you?
75% of Salesforce clients now expect a consistent experience – be it through social media, mobile, or even in person. Immediacy is also important with Econsultancy reporting that 64% of consumers expect companies to interact with them without delay.
A Walker study also identifies that by the year 2020, rather than price and product, customer experience will become the key brand differentiator and 73% referring to customer experience as an important factor in purchasing decisions.
A better CX also mean that you can charge more with 86% of buyers are willing to pay more for a great customer experience.
In 2017 an Accenture survey highlighted that 52% of customers have changed suppliers in the last year due to poor customer service (Ed UPDATE 02/01/20: the latest report is now December 2019 and includes other recent stats too, 17 Stats That Show Why CX Is Important) and research from Ombudsmen Services reporting 79% of people will avoid a brand or company if they have received poor service in the past how best can you ensure you look after you customers?
So where does this bring us to and what tools can we use to better engage our existing customers. In the context of your e-commerce store we’d recommend you look at adding a helpdesk service.
What do you need to consider when choosing one?
There are many on the market so make sure your choice:
Whilst your objective should be “Efficient Problem Solving”, which can be measured in terms of Time and Improved Customer Satisfaction, nay Customer Delight, the ultimate goal is Customer Spend Retention and increased Customer Lifetime Value!
Are you supporting your customers as well as you might?
Or are you spending money chasing new opportunities when simply focusing a little TLC on your existing customers could yield quick and lucrative new business?
Talk to us about how we can help you grow your business through improved CX, better customer retention and unlocking the additional revenues that exist within your existing client base.
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