Most marketing budgets are backwards.
When the goal is to win new business (and it always is), money goes to awareness campaigns, lead generation, and cold outreach.
Meanwhile, the most profitable customers (or clients, users, patients, readers, etc.) may already be within reach.
Yes, acquiring customers costs more than keeping them. Everyone cites that “5-7x more expensive” stat, but the multiple doesn’t matter. There’s other math working in your favor. Small increases in customer retention can drive outsized profit gains. Existing customers tend to spend more, be less sensitive to price changes, and, when they’re happy, bring you free referrals. Despite all that, retention and referral projects remain chronically underfunded.
Stop going all-in on new business. Focus on getting that second sale with an existing customer. Then the third, fourth…
Some cost-effective ways to mine what you already have:
- Send thank you cards or make quick calls.
- Create referral bonuses or credits for customers who refer new business.
- Build a dead-simple satisfaction survey (doubles as an early warning system).
- Send a note to celebrate customer anniversaries or milestones.
- Reward loyal customers with unexpected upgrades or bonuses.
- Do exit interviews with lost customers or lost opportunities to learn what went wrong.
Happy returning customers cost you nothing to acquire. And they’re awesome salespeople. Word-of-mouth is free, high-trust marketing that even the most clever, well-funded campaigns can seldom match.