As a business owner, capitalizing on consumer intelligence for business growth is one of the biggest opportunities—and challenges—you face.
Your marketing budget needs to be carefully allocated to drive maximum productivity. Do you invest a major portion of your budget designing a market appeal to new customers; or prefer retaining a loyal clientele base?
Expanding into unexplored territory may seem to create a win-win situation than investing in already existing customers, but is that practically viable? Does the ‘quality over quantity’ principal not apply here?
With surplus demand and finite resources, quantifiably measuring output against input is easier said than done.
The Importance of Customer Acquisition
It goes without saying, that the greater the number of clients, the more is your market reach and the easier it is to meet your short-term revenue goals.
However, that may not be the only way to increase sales; up-selling to already existing customers can have a much greater return on investment. There’s where the concept “customer life vale” comes into play.
However, customer acquisition will also fuel business growth for obvious reasons, which is why inbound marketing tools are leveraged to mine data and dig up relevant potential customers and increasing the rate of conversion.
Customer Retention-Because Old Is Gold, Right?
Having your most loyal customers come back for more establishes your credibility. It is also an effective way of advertising through word-of-mouth.
Companies that rank high on retention rates have succeeded in strategically positioning their product or service in the minds of the customers.
This makes the customer attach sentimental value to the brand, inspiring loyalty.
Customer retention inevitably leads to customer acquisition through referrals and as an example of exemplary customer service. A happy customer will always propagate his experience ahead, spreading positive word-of-mouth about your brand.
From A Revenue Point of View
As established earlier, customer acquisition certainly means greater sales volume and hence higher revenue generation. However, it can only be estimated based on a budgeted sales forecast. The likelihood of meeting that forecast is based on customer demand and situational factors.
However, if a firm intends to measure its rate of consistent growth and plan the next fiscal year, a more committed and loyal customer base will streamline the process. Decisions based on budgets require substantial information to envision far into the future. The value derived from a client can be estimated for the length of time that they are retained for.
Having a clear view of “customer lifetime value” will help you funnel resources in the right direction—be it retaining existing customers or acquiring new ones. As a business consultant, having worked across a range of industries, resources on my websites can be helpful for businesses to understand the deep relation between marketing and customer loyalty!
