The first songbook published by the Girl Scouts in 1925 included a little ditty about making new friends but keeping the old. As the song goes, one is silver and the other is gold. With gold trading in the vicinity of 26 times more than silver, those lyrics might offer a valuable lesson to today’s marketers.
Finding new customers is critical for any business but failing to focus on keeping your old customers at the same time can be disastrous. Attracting new customers costs the average company 5 times more than keeping existing customers. And Gartner reports that 80% of future revenue will come from just 20% of today’s customers. For those still not convinced to focus on keeping the right current customers, consider that a 5% increase in retention can increase a company’s profitability by 75%.
Clearly, keeping your gold customers pays off but in a recent survey of marketers by Econsultancy, only 18% reported that they will increase their investment in retention.
Who is focused on your “gold” customers when you are looking for shiny new silver customers? The answer all too often is your competitors.