All businesses are motivated by gaining new consumers, yet this strategy has its limitations. A company must eventually change its emphasis from attracting new consumers to keeping the ones it already has in order to succeed. Loyalty program management software helps you retain customers for the long term which provides you with the opportunity to deliver more ongoing value, create more individualized content, cultivate a brand champion, get recommendations, and generate favorable word-of-mouth marketing.
The acquisition grows your customer base while Retention grows customer lifetime value
It should go without saying that a business has no reason to exist if there are no clients to serve. To start your business, you needed to get at least a few clients and for this acquiring rewards management software is the best strategy. You may now increase your customer base and find more business prospects with the continual process of customer acquisition. Second, the projected worth of a customer over the period of his engagement with your business is known as the customer’s lifetime value. It goes without saying that repeat clients are nearly always more beneficial to your business than one-time customers. By encouraging them to do business with you repeatedly, a solid customer retention plan enables you to optimize the customers’ lifetime value.
In contrast to customer acquisition, customer retention leads to higher ROI
Without a doubt, maintaining a loyal customer base is essential to the success of any business, and a well-planned customer loyalty campaign management plays a great role in it. It’s not always a good idea to spend your valuable resources on attracting new clients. The likelihood of selling to an existing customer is actually 60–70%, whereas the likelihood of selling to a fresh prospect is only 5-20%. The best source of expansion is directly in front of you: your current clientele. You simply need to make them happy before figuring out how to give them even more value.
The acquisition is more expensive as compared to retention
Research shows that customer acquisition is more expensive than retention using rewards management software. In actuality, gaining a new customer can cost up to five times as much as keeping an old one. Why is the difference so great? Keep in mind that you are essentially beginning over with fresh clients. They probably haven’t used your brand before and might not even trust your business. It costs time and money to get their attention about your goods, and it costs, even more, to persuade them to buy from you.
It’s not necessarily incorrect if your growth plan emphasizes the acquisition, but for your acquisition and retention initiatives to be successful, they must coexist. High-quality customer data is the foundation for great customer experiences, which will increase lead and customer retention. You must speak with our staff at Novus Loyalty for further information and guidance on creating loyalty program management software. We have already worked on and created a number of customer loyalty campaign management strategies, so we will no doubt perform admirably for you as well.