How many of you when you were kids liked getting new toys? Who doesn’t, right? And every time you got one, it seemed like the only toy in the world, it made you forget all about the others. Sales are not that different. Everyone wants those new customers and puts all the efforts there. But by doing so, you forget all about the existing customers.
The problem is, you can’t let “new toy syndrome” affect your sales strategy. New customers are great, but you shouldn’t forget where real opportunities lie: existing customers, the ones who have already bought from you in the past.
Acquisition versus reactivation
Companies spend a lot of time and money acquiring new customers. But eventually, those new customers become inactive. When that happens, most companies just start looking for more new customers. Yet that’s not really the most profitable approach.
If you have a huge existing customer base that is being neglected, you’re leaving money on the table. And existing customers are actually more valuable than you might think:
– its five times more expensive to acquire a new customer than to keep an existing one;
– selling to an existing customer is 60 to 70 percent more likely, while the probability of selling to a prospect is as little as 5 to 20 percent;
– existing customers are 50 percent more likely to try new products and 31 percent more likely to spend more money;
– increasing customer retention rates by 5 percent, a company can increase profits by 25 to 95 percent.
The value of existing customers
There’s so much emphasis these days on getting a customer through the sales funnel and closing the deal. Sales shouldn’t be the end of the relationship with that customer.
If somebody has purchased in the past, you already know you’ve done something right. This customer already knows and likes your business enough to have actually bought from you. Wouldn’t it make sense that the same person would buy again?
A smooth sales process
Selling to existing customers can actually be easier than selling to new customers. That’s because there’s no need to do any kind of lead generation because you already have much of the information you’ll need to sell to these people, like contact info, preferences, personality etc.
Because you’ve worked with them before, you know what they’ve already bought, which should give you insight into what they might buy now.
Also, you’ve even already developed a relationship with a return customer. Customers like familiarity, and if they know you and have worked with you in the past, they’ll be more likely to listen to what you have to say.
Having a reactivation program
While new customers are key to business growth, if you want your business to last, you also need loyal customers. One-time buyers aren’t going to be your best advocates. But those customers who keep coming back are going to recommend your business to others and be exponentially valuable.
As a result, your reactivation program will be your first step toward nurturing those customers who may, in turn, become loyal advocates.