Article
Retaining Existing Customers – How to Do It Right!
Table of Contents
What is an existing customer?
Existing customers are defined as those who have made at least two purchases from the same supplier. This status is usually preceded by targeted marketing efforts by the company, whereby prospective customers are first converted into new customers and then – ideally – into loyal existing customers.
In practice, attractive special offers and price advantages for new customers are not uncommon. Many companies pay their sales teams substantial bonuses for acquiring new customers, thereby further intensifying the focus on this group. However, what initially sounds like a sensible approach actually represents an unfavourable prioritisation for both existing customers and the company itself.
Why is retaining existing customers important?
The nature of your customer relationship influences your marketing and sales strategy. Existing customers are already familiar with what you offer and do not need to be persuaded. Prospective customers, on the other hand, require a more in-depth approach, as trust must first be built up. However, it remains uncertain whether this will result in a purchase of your product or a booking of your service, and to what extent.
Why is retaining existing customers more important than acquiring new ones?
Customer retention requires less effort than customer acquisition. This results in enormous cost savings in terms of your marketing and sales. Furthermore, you have relevant information about your existing customers from previous transactions. You have an understanding of their wishes, needs and expectations and can address these in a more targeted manner. For this reason, it is more cost-effective for you to retain existing customers than to acquire new ones.
You can rely on existing customers
Repeat purchases are a sign of trust, appreciation and loyalty. Consequently, existing customers usually view a company favourably. Because of the existing relationship, they are less likely to switch providers, even when problems arise. This provides planning certainty. Digital systems also make it possible to measure customer loyalty and incorporate it specifically into the further development of the company’s strategy.
Recommendations
There is hardly any form of advertising more effective than satisfied regular customers. People are keen to share positive experiences. Through targeted customer loyalty programmes, this behaviour can be harnessed – without any extra effort. Satisfied customers recommend the company to others and act as credible brand ambassadors.
Recommendations are no longer limited to one’s personal circle. Consumers are particularly keen to share their experiences on social media. Companies can also showcase positive feedback on their own website. To prospective customers, such testimonials come across as authentic and can positively influence their purchasing decisions. This leads to the acquisition of new customers – efficiently and cost-effectively.
Larger shopping baskets and higher value added
The average basket value is higher for regular customers than for first-time buyers. Studies show that existing customers generate six to seven times as much revenue annually as new customers. Those who identify with a brand are also less price-sensitive – an advantage when it comes to price adjustments or changes to the product range.
A faster purchasing process through trust
New customers go through several decision-making stages before making a purchase. Businesses must actively address any uncertainties. With existing customers, much of this effort is unnecessary, as trust is already in place. This significantly shortens the purchasing process.
What is the best way to retain existing customers?
The benefits highlight just how important a targeted customer retention strategy is. Key measures include:
Personalised and respectful communication is crucial. A personalised approach, rather than standardised clichés, gives customers the feeling that they are being taken seriously. Training for sales and service staff helps to achieve this. Companies should take care not to neglect their existing customer base in favour of new prospects, as this can lead to dissatisfaction and customer churn.
Loyalty cannot be taken for granted. Repeat purchases are a sign of appreciation that should be reciprocated. Small gestures such as thank-you messages or thoughtful gifts on special occasions can be easily integrated into existing processes and have a lasting impact.
Targeted discount campaigns further strengthen customer loyalty. They give customers the feeling that they’ve chosen the right supplier, whilst also boosting sales. Often, products at the standard price are purchased at the same time.
Loyalty cards or reward schemes encourage long-term customer loyalty. They create a sense of belonging whilst also providing valuable insights into purchasing behaviour. This data can be used for personalisation.
Transparent bonus and reward schemes – such as those for referrals or specific purchase volumes – also provide incentives for further purchases. Tailored benefits reinforce this effect.
Newsletters and customer magazines provide information about new offers and developments. Satisfied customers are more likely to be willing to receive such information. At the same time, surveys provide an important basis for identifying areas for improvement at an early stage. You can choose to thank participants with bonuses or discount vouchers.
Good accessibility is also crucial. Alongside traditional channels, digital solutions such as chatbots are becoming increasingly important. It is important to be approachable even outside of specific purchasing processes.
Finally, outsourcing certain services can be a sensible option. External solutions enable continuous support whilst taking the pressure off internal resources. This benefits companies, staff and customers alike.