Let’s get real. Marketing costs money. When budgets are tight, where is the best place to spend your direct mail or email marketing dollars? Your existing customers. While you need to grow your business and backfill customers who drop off for one reason or another, your existing customers will always net you the best return. Here are five reasons why.

1. They spend more.

A retailer may win a new customer based on their need to purchase a new bathing suit, for example. But if you retain that customer, they will continue to buy everything from shirts, shorts, and blouses to accessories. RJMetrics found that, on average, existing customers spend 67% more than new ones.

2. They are more profitable.

You’ve probably read that it costs 5x more to acquire a new customer than to retain an existing one. Now let’s put that into perspective. Let’s say it took three touches to win a new customer using a mix of channels. That customer spends $50 with you. If each touch cost you $5, on average, that $50 sale netted you $35. If you market to an existing customer, it might take only one touch to make the same $50 sale. Now, instead of netting $35, you net $45.

3. They are easier to sell to.

Your existing customers know and trust you. They remain engaged with you because they like what you have to offer. Because they are already engaged, when you make a sales pitch, you have a 65% chance of making a sale compared to only 13% for a prospect. If you need to hit a certain sales goal fast, focusing on your existing customers will be your best bet.

4. They win you new customers.

Did you know that when you treat your existing customers right, they refer 50% more people to your business than new customers do? That’s right! They do the marketing for you. What’s not to like about that?

5. They are the core of your profits.

Have you heard of the 80-20 rule? It applies to customers, too. Eighty percent of your profits come from 20% of your customers.  You want to keep them! Bain found that for every 5% increase you have in customer retention, you increase your profitability by 75%.

Every business needs a profit boost. If it’s been a while since you created a direct mail or email campaign specific to your most valuable asset—your existing customers—maybe now is a great time to do so.



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