Printbuyers Online

Retention marketing

My goal is to acquire new customers profitably. Do I really need to consider retention when planning my direct marketing campaigns?

Please do - for the simple reason that it costs about five times as much to acquire a customer as it does to keep one satisfied and buying from you. That's no misprint...a qualified buyer in hand is worth significantly more than a smattering of prospects who have not yet had a relationship with your company.

Very few businesses earn enough profit on one sale to justify forgetting about the buyer altogether. Even GM and Lexus know that it makes good business sense to keep the lines of communication open with past buyers (through surveys, event bulletins, and "customer only" appreciation discounts, for example). Launching regular initiatives such as these will keep your brand at the top of the prospect's mind and make it all the more likely they'll buy from you again and again.

And once you're a believer in the eminent sense of retention marketing, don't overlook the famous "Pareto principle" that says 20% of your customers deliver 80% of your profits. The truly loyal group of buyers within your customer database will tend to be price insensitive - so you should reward them with treatment worthy of royalty. Is it surprising that such firms as American Airlines and Hyatt reserve their most generous rewards programs for their highest volume customers? Even a small courtesy with a personal touch will keep your best customers from wandering away.

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