Everything is ready to launch — from advertising to your carefully thought-out pricing strategy. You’re ready to let the world, and prospective customers, know why your company is an obvious choice in your industry.
You cannot rule out the need to constantly gain new customers to expand your business, but it is easy to forget that almost 50 percent of the revenue that most businesses generate is due to 20 percent of the customers that they retain.
This is why experts often emphasize that you shouldn’t discount the hidden potential in your existing customers, as opposed to putting all pf your energy in gaining new ones. After all, if you don’t offer a reason for your customers to stay, your competitors will give them reasons to stray.
If you’re ready to gain more value from your existing customer base here’s how to start:
1. Find out your customer acquisition cost.
How do you acquire new customers? Do you use traditional methods such as cold calls, banner ads or online marketing? Whichever tactics you employ it’s important to know your precise customer acquisition costs — the cost to acquire a new customer.
These costs include marketing and incentives, to introduce new customers to your products and services. Decipher your true acquisition costs by dividing total acquisition costs by total new customers over a set period of time, or use this helpful online calculator.
If your customer acquisition cost is comparably higher than efforts used to develop your current customer base you may want to focus on retention instead.