Businesses are always seeking to expand their profits and customer base through rigorous marketing campaigns. Enterprises struggle with two concepts of either working hard to acquire new clients or working hard to retain their current clients. The benefits of customer retention seem to outweigh customer acquisition, but this does not eliminate the need for new leads in the business. This article assesses the ideal strategies companies can use to manage their leads.
Existing customers provide a company with feedback about the products and services they offer. The feedback helps the company improve on the necessary aspects, and this reviews and feedback can attract a new bundle of customers to the business.
Customer loyalty and feedback are one of the most inexpensive marketing tools for a business. While you are still wondering how to generate leads for your company, your loyal customers could do this easily through positive feedback online and word of mouth to friends and family members. A percentage of the recipients of the positive feedback will become new clients to the company, and their satisfaction will continue the cycle. Subsequently, a company can leverage the power of its existing customers to acquire new clients.
Evidently, a company should evaluate its strengths, weaknesses, and needs before deciding on the ideal concept for their business at any particular time. Notably, one concept may work better in certain circumstances than the other.
Studies reveal that acquiring a new customer is at least six times more expensive for a business than retaining an existing customer. Ideally, a marketing campaign for new clients is aimed at convincing a potential client that the company’s products or services are worth their time and money.
In contrast, a marketing campaign that targets existing customers is aimed at strengthening the customers’ loyalty to the company’s products and businesses. Research shows that the odds of converting a prospect into a client are approximately 5-20% while the chance of retaining an existing customer with a marketing campaign is 60-70%.
A company can conduct customer retention campaigns by providing sales during special holidays, discounts on bulk purchases, and loyalty programs that enable the customer to accumulate and redeem points during purchases. To attract new clients, marketing campaigns should seek to highlight the strong points of a company’s products and services to increase the conversion rate. Potential clients need to understand how a product or service works for their benefit. Conducting targeted campaigns that appeal to different groups of people in different ways often increases the conversion rate of new clients. Evidently, it is more cost effective to reinforce marketing on existing customers.
Speed of Sales
As the adage goes, it is impractical to teach an old dog new tricks. Loyal customers tend to get comfortable with the features of a product or service offered by a company. Consequently, companies seemingly find that it is an uphill task to introduce a new product or feature to loyal customers because they are typically content in their comfort zone.
In such a case, new clients can provide a good customer base for new products, new services, or new features of a product. A potential client will likely accept a new item because it could be their first experience with the company. Therefore, the customers have no comparisons to make or limitations to put them off in the product. The speed of the sale of new products is thus faster with new clients than it is for old clients. New products often create a good impression to the new clients who can potentially turn into loyal clients for that particular item.
A large clientele base results in high profits for a company. With the 5-20% conversion rate of new clients, a business is likely to experience an increase in profit. It is usually an exciting experience for a firm to attract new customers as this gives the marketing team a boost in their efforts and ultimately increases profits by a certain percentage.
In addition to new customers, research shows that a loyal clientele base comes with the promise of predictable profits. This means that a company can plan its production and operations with an inference into the approximate level of profits they have had in the previous years. Predictability in regards to profits gives companies comfort in their financial position.