Did you know that it costs roughly six or seven times more to acquire a new customer than to retain an existing one?
As consumers, we love to buy things from brands we like and companies we connect with or feel like their products represent our personalities.
It is no coincidence that companies who look after their customers do well in business. But do these businesses and companies always rely on new customers purchasing their products?
As an example, Apple grew to stardom from the launch of the humble 1st generation iPod. However, many of those customers who had an iPod were also the first people who would have considered forking out money to purchase an iPhone and subsequently a Macbook Air as well as an iPad when those got released. Why?
Well, for a start, they had already entered into the Apple ecosystem with the purchase of the iPod and got to experience their customer journey.
Consumers purchased their product from Apple, brought it home, setup an Apple ID for themselves to configure their smart devices and connect to their computers as well as begin loading apps.
The creation of the Apple ID may seem trivial and insignificant to us, however to Apple, that is a very vital and valuable step. It is at this point that you are part of a database of customers that they own. Using this information, they are able to remarket their latest products, devices, apps and software.
The learning for us as businesses is that we should always maintain a database or record of our customers so that we are able to re-engage them at a later date when we have something that is worth sharing or selling.
Remember, Apple doesn’t only broadcast to their customers when they have a new product to sell. They also send updates about software upgrades or want to share info about devices that would be useful to their customers.
According to data compiled by Vision Critical, it costs roughly six or seven times more to acquire a new customer than to retain an existing one.
Apple has also made it really easy for you to get help with your device by having “a geek bar” setup in-store, with which you can book an appointment online through their website and get a qualified support employee to look at your device and help you troubleshoot it.
The second thing that Apple can teach businesses is about service. For nine years in a row, Apple dominated the smartphone customer service satisfaction survey with scores as high as 855 / 1000. Vision Critical also found that customers are 3 times more likely to tell their friends about a negative experience.
This is why service becomes so important in business. Customers not only deserve good service but have come to expect it with the high benchmarks set by such mega firms as Apple, Samsung, Zappos amongst others.
More recently, in July 2014 Apple launched a trade-in program in Australia where you are able to trade-in older Apple devices in exchange for store credit and purchase newer ones.
In reality, this is a cleverly phrased loyalty program.
We as businesses can learn from this. Customers love loyalty programs which give them a clear benefit. If you are able to offer loyalty programs as part of your product ecosystem, don’t be shy about it. It is a win-win for both parties since the consumer get their discounted product for being loyal and the business is able to leverage an established customer relationship to sell more of its wares.
In conclusion, as businesses, we should focus on having a customer retention strategy to enable us to grow. We can do this by capturing our customer’s details to re-engage, stay in touch and continue to provide value, support and offer up savings in exchange for loyalty.