Acquiring new customers is important, but retaining them is more profitable. In order for a business to survive, it needs money. To make money, you need customers. More specifically, you need happy and loyal customers. If your business focuses on customer satisfaction, it is more likely to keep these customers happy and returning. Gaining a new customer is similar to making a new friend, as it is exciting and rewarding. Just because you’ve made a new friend, you wouldn’t ignore your old friends. The same applies with customers. The long-term customers add more value in the long run, than newer/single-deal customers. So, if we can keep a larger percentage of the long-term customers happy, we end up with more profitable and predictable customers.
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Why Customer Loyalty Really Matters and How to Improve It (Infographic)
According to the 80/20 rule (the Pareto Principle), 80% of business comes from 20% of customers – in other words, a small group of your customers is generating the bulk of your revenue. That’s why acknowledging, respecting and rewarding these 20% is imperative. After all, loyal customers are the biggest assets of any business. In fact, customer loyalty is the key determinant of an organization’s success, yet many companies still keep focusing more on sales and customer acquisition. Getting new customers is great and necessary, but keeping them coming back on a regular basis is gold.
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