Suppose you face the following situation: you are a small business that has at the moment 50 customers. A marketing agency has a strategy that can gain each month you 100 new customers but they tell you that you will lose 50 of your customers within the same month. The bottom line: 50 new customers each month; 650 customers by the end of the year. Another agency presents you a very different strategy: you gain 60 new customers each month, and you don’t lose more than 10 each month. The bottom line: 50 new customers each month; 650 customers by the end of the year. One is focused on customer acquisition while the other on customer retention.
Which would you choose? Which should you choose?
Purely in terms of the number of customers, the customer acquisition and the customer retention strategies actually produce identical results. Nevertheless, by the end of the year the former strategy will get you in a worse position as a business in comparison to the latter strategy simply because high customer turnover has additional "hidden costs" while high customer retention has additional "hidden benefits". I used quotes because, in fact, there are not truly hidden; we do know quite a lot about them. Moreover, any successful mom-and-pop shop or business knows about them.
Let me run up some numbers by you:
- Customer acquisition costs 7 times more than customer retention.
- Failure to retain customers means helping (literally!) your competitors - 61% of consumers take their business to a competitor when they end a business relationship.
- According to Frederick F. Reichheld and Phil Schefter increasing customer retention rates by 5% increases profits by 25% to 95%.
- Failing to attend to customers can cause businesses to lose around 20% of their customers annually.
But even taking money and time resources out of the equation, a retained customer means increased referrals. Today’s customers abhor (most forms of) online ads - I bet you have something like Ad-block installed on your browser as well. Retained customers are mostly loyal customers and they act as marketing agents on your behalf. What is more, they represent the most authentic type of ad possible: positive word of mouth! This is why our mobile apps are so successful.
How we help you retain your customers
Alphatech whole vision rests on customer retention as we made abundantly clear on your homepage - it is, in fact, our greeting card! We have created a lot of features designed to tackle this issue head on:
- Creating a bond and rewarding loyalty (Loyalty Card, Social Feed, Events/Happy Hour, Our Blog)
- Offering versatile options for keeping in touch with you (Social Feed, Feedback, Our Blog, Webpage)
- Simplifying and making available to the customer various communication channels (Click to Call, Click to Email, Social Feed)
- Getting to know your customer’s opinions about specific issues (Survey, Social Feed, Feedback)
The smart way, the responsible way, the ethical way of doing mobile business is by respecting your customers. Call us now!