Cultivating your existing client base is one of the most profitable ways you can take your business to another level. Dictionary.com defines cultivate at “to promote the growth or development of.” Why wouldn’t every company look at their existing clients and help them grow and develop?
While it is important for a business to develop plans to acquire new clients, looking beyond the existing clients is not what makes company profits increase. Building and enhancing the relationships with your existing clients must be a top initiative and must be done at least annually.
“Did you know that it’s 6-7 times more expensive to acquire a new customer than it is to keep a current customer?”
SignalMind’s infographic regarding the Cost of Acquiring New Customers vs Retaining shares the data behind the value of customer loyalty. A few of the statistics shared include:
- The probability of a sale from a brand new customer is only 5-20%.
- The probability of converting an existing customer is between 60-70%.
- A 5% increase in customer retention can increase profits by more than 25%.
- Loyal customers are worth up to 10 times more than their first purchase.
These statistics prove that providing a marketing program to cross-sell to your existing clients is one of the most beneficial tools you can create.
From the profit perspective these clients possess a reduced price sensitivity, reduced competitor switching, more repetitive purchasing, stronger referral opportunities, and the relationship is already established, so is enhanced, with them.
How to Cultivate Existing Clients
Existing clients are much more profitable than new ones. But the key is to know how to cultivate them. Each client is different and the best way to find out what they want specifically, is simply to ask them. Whether it is sending out a survey to gauge their feedback or having a face-to-face meeting to discuss their wants/needs, it is easier to engage your client for the long-term when you show interest and take action to help them grow. One way to cultivate clients is to build a 7 Steps to Developing a Client Touch Program and implement it successfully.
Some Facts About Cultivation
A few need to know facts:
- 91% of companies do nothing to retain their clients; the average American business loses 50% of its customers every five years – according to Harvard Business Review
- A 10% increase in customer retention is equal to a 30% increase in company value, according to Bain & Co.
- You are 4 times more likely to do business with an existing customer versus a new customer, according to Forbes
- The probability of selling to an existing customer is 60-70% vs. 5-20% to a new customer, according to RocketWatcher
Why do you think it’s easier to sell to existing clients? Because, the client already knows you and your capabilities? Whether you are offering new services to your existing clients or trying to ensure they are aware of your capabilities, consider developing a client touch program. A touch program includes ways your firm can expand current offerings to existing clients. With an hour or two for planning and a few hours per month in execution, this type of program is easy to maintain and can be very profitable.