You’ve read the title of this article and think it could be a joke. Why on earth would you stop trying to attract new customers to your business? Bringing in more customers means you keep earning more money, right?
Well, that’s where you’re wrong. If your company only attracts new customers, there’s no guarantee you’ll make more money. You’ll need to draw in more customers every single month and ensure they’re spending more than the ones did in the previous month.
To truly ensure your small business grows and becomes successful, you have to build customer loyalty. This is what needs most of your focus – and we’ll explain why.
Loyal customers provide more revenue and are less expensive than new ones
Did you know it’s up to 25 times more expensive to acquire new customers and 65% of a company’s revenue comes from existing customers?
This shows that loyal customers are the ones generating most of your income and it costs far less to retain them compared to acquiring new customers. When you’re operating on a small budget, it makes sense to devote more of your money to customer retention as it’s more worthwhile.
Loyal customers actually bring in more new customers
Look, the ideal goal is to establish a customer base and draw in more customers who you can turn into loyal ones. It means you’re constantly dealing with repeat customers and your revenue grows. Rather than focusing on bringing in new business, you should develop a loyalty program to retain existing customers.
Why? Because 83% of consumers will recommend a company they trust and are loyal to. Recommendations influence other consumers’ buying habits, meaning your loyal customers can literally help you attract new clients as well! They do all the hard work for you by talking about how great you are and writing positive reviews.
How do you build customer loyalty?
Hopefully, you understand why customer loyalty is more important than acquiring new customers. The next question is easy: how do you build loyalty with your brand?
The first action is to partner with a brand agency and work on cultivating an image. The goal is to appeal to the people within your target market – make them relate to your company and buy into your values. This establishes trust, which is a key factor in influencing people’s buying habits.
If consumers trust your brand and who you are, they’re more likely to spend money on your business and stick around for longer. At the same time, you can build more loyalty by introducing loyalty schemes or programs. Reward customers for coming back again and again with perks like points they can use to spend on products or special loyalty discounts. Better yet, tailor your loyalty discounts to the customer based on previous buying habits.
This encourages people to keep coming back because they know they’ll gain something from your business. All the while, you’re upholding a core brand message and ethos that these customers relate to, so they want to keep using your business over others.
The moral of the story is that customer loyalty is essential. Do you want your small business to thrive? Quit focusing on new customer acquisitions and spend more time worrying about building a loyal customer base.
