Nowadays, everyone is seeking ways to cut unnecessary costs. Another priority is making your dollar stretch as far as possible. Allocating your spending wisely is the first step to getting the most bang for your buck. That’s why having an accurate understanding of how much it costs to acquire new customers, along with the cost for keeping repeat customers is a must. If you aren’t aware of these costs, these details have the potential to help you completely reinvent your marketing strategy.
How Expensive is New Customer Acquisition?
As natural as it might be to want to spend the majority of your time and resources going after new customers, it may not be in the best interest of your budget. If you’re unsure of how you can calculate what your customer acquisition costs are, just divide the amount of money you spend on marketing by the amount of customers you’ve gained. That amount will provide you with your customer acquisition costs. So let’s say for example, you’re a new eCommerce clothing retailer, and you’ve spent $1000 on Facebook ads trying to get new shoppers. The ads resulted in 100 brand new customers. That would make your customer acquisition costs $10 per customer.
While that may sound like a low cost, more context reveals a different story. The customers that purchase from the store aren’t coming back often, so that means they’re often buying a $40 hoodie and leaving. Since that’s the case, and the retailer marks up the clothing by 100%, a $40 sale really equates to $20.00 per sale for the retailer. And with that $20 per sale, the retailer is responsible for providing web hosting, paying employees, shipping costs and more. So that leads us to wondering about ways to reduce customer acquisition costs.
The Impact of Repeat Customers On Your Bottom Line
One of the best ways to avoid high customer acquisition costs is to prioritize reducing customer churn. By prioritizing ways to get customers to remain loyal with your brand, you can dramatically reduce how much you spend acquiring new customers. Part of the reason why is because acquiring new customers is five times as costly as keeping current customers. Additionally, selling your products or services to new customers is typically easier than trying to win over new customers.
Another reason to prioritize customer retention is because of the impact they can make when it comes to referring new customers to your brand. Your most loyal customers could serve as your brand’s biggest advocates. And that’s especially true if you provide your customers with stellar service every time they shop with you. According to research from Forbes, raising your retention rates by 5% has the potential to increase your profits by 25%-90%. And luckily, increasing your retention rates is likely easier than you think.
Steps to Getting More Repeat Customers
With the right strategy, getting more customers to shop with your brand on a regular basis is a breeze. By remaining persistent in your outreach, while regularly reminding how valuable your customers are, you’ll be getting shoppers to return to your store over and over again in no time. Some best practices for getting more repeat shoppers are:
1. Reach Out Early and Often
Failing to stay in touch with your shoppers can be costly. By providing your customers with regular outreach, it’s easier for your brand to remain at the top of mind. Regularly reaching out to your customers also makes it easier for them to remember the great experience your brand provided, too. This can be essential in making your past customers go directly to your store the next time a need arises, instead of potentially shopping with a competitor.
2. Personalize Your Outreach
The impact that personalization can have when it comes to helping your customers remain loyal to your brand can’t be overstated. That’s because brands often create generic “one-size-fits-all” messaging that doesn’t often resonate with audiences. There are numerous ways you can go about personalizing your marketing messaging, too.
For instance, you could send a postcard to follow-up with customers to ask how they liked their order, and to rate their experience. Another way you could make your outreach more personal is by leveraging your first party data in your marketing efforts. That would allow you to connect with customers on birthdays, when you restock their favorite items, or when you simply haven’t heard from them in a while.
3. Use Marketing Methods That Will Make Your Brand Stand Out
One of the biggest mistakes you can make as you develop your customer retention strategy is to rely on the same outreach methods as everyone else. Considering how filled email inboxes are nowadays, you benefit immensely from incorporating communication methods that aren’t as oversaturated. That’s where direct mail campaigns come into play. By using direct mail to keep in touch with your customers, you’ll find that it’s easy to cut through the noise. Getting started with your first direct mail campaign is simple, too.
Let Direct Mail Manager Help You Start Acquiring Repeat Customers Today!
Considering the impact that prioritizing repeat customers could have on your business, you need every resource available to help you establish a winning customer retention strategy. One of the biggest resources capable of helping you improve your customer retention rates is a reliable direct mail automation platform. That’s because they provide you with all of the benefits of direct mail, while eliminating much of the heavy lifting involved in direct mail campaigns.
You can start improving your customer retention strategy today with help from Direct Mail Manager. Direct mail automation is essential in helping you reduce customer churn because of all the opportunities it provides for users to reach out to customers with unique, personalized messaging. If you’re ready to transform your customers into loyal brand advocates, you don’t have to wait. Just create a free Direct Mail Manager account, upload your first list and start sending direct mail to your audience today!