Have you noticed that many companies have great incentives and rewards for new customers? Banks offer interest-free periods and many bonus features for signing up to their credit cards. Telecommunication companies offer discounted rates and ‘bundles’ to entice people to switch over.
But what about existing customers?
I have heard many stories of people who have discovered they are paying far more for a service than new customers, with the company choosing to ignore its existing customer base.
Is this a wise business decision?
It can be tempting as a small business to focus all your marketing efforts on obtaining new customers. And often the seemingly logical way to do this is to provide incentives and discounts to entice people. But are you rewarding your loyal customers?
Do you think a loyal customer is going to remain loyal, if they discover that they are paying more than someone who has just joined you? Loyal customers are generally people who will recommend you to others (free advertising!) and will champion your business to others. How long will they continue to do this for you if they feel neglected or you take them or granted?
Research shows that it takes far more time, money and resources to gain a new customer than it does to retain an existing one. Surely it makes more sense, then, to focus a significant portion of your marketing efforts on your existing customers?
Loyalty programs are one such way to do this. Bakeries and coffee shops are some of the most well-known examples: frequent buyers of their products receive free items after a certain number of purchases. It creates incentive to continue to buy their products and to potentially purchase multiple items in order to reach their reward.
But you don’t need to have an official Loyalty Program in order to look after your current customers. Sometimes it is simply about treating long-term clients with the same enthusiasm and respect that you do a new customer. Always make them feel special and appreciated.