80 percent of your future profits will come from just 20 percent of your existing customers. - Gartner Group
Santa Monica, CA (PRWEB) August 15, 2013
According to the Gartner Group, 80 percent of future profits will come from just 20 percent of existing customers. That means the revenue sources most companies have been trying to find are most likely sitting right under your nose, waiting to be nurtured and cultivated.
Customer Retention Takes Time to Bear Fruit
Spending time to develop close relationships with customers is likely one of the reasons why marketers don’t always prioritize customer retention. Unlike lead generation or customer acquisition, retention campaigns take longer to produce results.
Retention is Likely to Be More Profitable Than Acquisition
Existing customers are much easier to sell to. According to our recent studies, the probability of converting an existing customer is 60 percent to 70 percent. The probability of converting a new prospect, on the other hand, is only 5 percent to 20 percent. These numbers make perfect sense because people are more responsive to individuals or companies they’re already familiar with, compared to complete strangers.
Repeat customers are also likely to spend more. Data from Laura Lake shows that repeat customers spend 33 percent more compared to new customers.
Customer Retention Can Have a Positive Impact on Acquisition
Customer retention and customer acquisition don’t have to be two parallel lines that will never meet. In fact, when done right, customer retention campaigns can actually bring in new business through word-of-mouth and referrals.
A study showed that satisfied customers tell nine other people about their positive experience. By providing excellent customer service, you increase the likelihood of getting referrals, which is priceless to any business. More importantly, their value can increase exponentially in the e-commerce and digital realms because they can spread much faster and easier online through social media.
About Retention Science
Retention Science is the first Retention Automation Platform that turns Big Data analytics and predictive algorithms into actionable retention marketing campaigns. Its Customer Profiling Engine analyzes the customer lifecycle and optimizes the time periods to re-engage customers with individually-tailored offers. Based in Santa Monica, Retention Science is named a Top 10 Software Company in Southern California by SocalTech and an “Innovation Agent” by Fast Company.
Learn more at: http://www.retentionscience.com/.