The most valuable asset any business has — is its customer data.
While this isn’t exactly breaking news, it is an important reminder that every business needs both customer retention AND customer acquisition strategies.
Without new customers, your business won’t grow. And without customer retention, profit margins and revenue quickly drop into unsustainable territory. This is true because it costs money to bring in new customers, whereas repeat transactions have exponentially higher profit margins.
Here’s another reason why: There are only three possible ways to increase sales.
- Find new customers (acquisition)
- Sell more often to existing customers (retention)
- Increase the average size of each transaction (acquisition and retention)
Look closely, and you’ll realize that two of the three require existing customers to fully function.
Further, it’s worth noting that #3 and #1 are not compatible. The more you increase your prices, or average transaction size, the more challenging it is to acquire new customers. On the flip side, repeat customers who are familiar with your business, and have a positive view of your products and services, are much more likely to increase their spend moving forward.
So what does this all mean? A business that does not have a robust customer retention strategy — is left with just one way to drive sales.
That is scary (and costly) as hell.
7 ways to re-engage your existing customers
- Identify and promote additional products and services that customers could purchase from you, but don’t.
- Add value by bundling products and services that work together or solve a customers’ problems
- Build stronger relationships by sending customers “Thank You / Appreciation” cards by mail
- Create and promote events or special offers for existing customers only
- Develop, implement, and promote a customer rewards program (i.e. earn points for each dollar spent, etc.)
- Focus on seasonality and timing-based opportunities to re-sell existing customers (i.e. Black Friday, Holiday, weekends, etc.)
- Monitor and beat competitors offers (price, quality, turnaround, customer service, value, community involvement, etc.)
Go “solo” and keep your business front and center
It’s also important to consider ‘how’ you reach out to existing customers. While modern technology makes it easy to reach customers on Facebook or via email, these channels are saturated with competitors and distracting information. They don’t work well either. The average engagement rate for a Facebook post is just 6.37%, and the open rates for email (to a house list) hover around 21%.
Those numbers, while helpful, are not sufficient as a core customer retention strategy. Social media and email are best used as components within a broader multi-channel strategy.
Direct mail on the other hand, is incredibly powerful and more meaningful to your existing customers. A jaw-dropping 98% of consumers (source: USPS) bring in their mail the day it is delivered, with 54% of customers (source: Adweek) saying that direct mail is their most preferred form of marketing communication. More importantly, customers who receive direct mail spend 28% more (source: Bizreport) than those who don’t.
But despite this overwhelming data, many businesses still resort to digital-only communications — with the reasons ranging from convenience, to budget, to lack of time or know-how. But no matter the reason, any business who does not use direct mail is surrendering customers and revenue.
So, are you leveraging your most valuable asset?
Upload your mailing list and sell more to existing customers
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