We all know how challenging it can be to attract and gain customers to ensure that you develop your business. That is why it is so important to nurture and value the customers you already have in your business.
Never make the mistake of thinking that you can easily replace old customers with new ones. It costs a lot more to attract a new customer into your business that it does to keep existing ones.
An import metric that you should be using in your business is “Customer Acquisition Cost”. To calculate the CAC, divide all the costs that you spent on acquiring customers, by the number of customers that you acquired in the period that you spent the money.
For example, if you spent R20 000 on marketing in a month and acquired 100 customers in the same period, your CAC is R200.00.
Some variables can impact on the straight-forward calculation. For example, you may have made investments in marketing in a new region. Or you may be in the early stage of SEO that won’t yield results until a later period. That is why you need to track where all new customers come from. Take time to find out how they heard about your business. Then register these findings as a way of determining your best marketing spend.
It is important to attract new customers. Yet, it is important to remember the value of customer retention and customer loyalty.
When you consider that it costs six to seven times more to acquire a new customer than it does to retain an existing one. Your existing customers are more than just figures – repeat customers are the foundation on which profitable businesses are built. So spend time nurturing these relationships and developing your existing customer base. Along with any new customers, your existing customers will help with your business growth.
Contact Coach Sonja Shear for fresh perspectives on how to maintain and grow your customer base and in turn, grow your business.