If you want to grow your company’s bottom line, you probably think you need to haul in a bunch of new customers. That’s not always true, though. In fact, you’re probably better off investing most of your focus in reactivating the customers you’ve already worked with. Here’s why - according to HelpScout:
- Increasing customer retention rates by even 5% boosts profits from 25% to 95%
- It is anywhere from 5 to 25 times more expensive to onboard a new customer than it is to keep a current one
- For a company with $1 billion in annual revenues, a moderate increase in Customer Experience can create an average revenue increase of $823 million over three years
- It is 16 times as expensive to build a long-term business relationship with a new customer than to build loyalty with old customers
- The average customer spends 67 percent more in the third year as a customer of your business than they do in the first year
- Businesses lose $1.6 trillion per year when customers abandon them for different companies
- Twenty per cent of a given company's customers generate about 80 per cent of its profits
- The average global value of a lost customer is $243.
- According to Marketing Metric, if a customer has previously purchased from your company, there is at least a 60 per cent chance that the customer will make at least one more purchase. If a new visitor comes to your site, though, there's only a 20% chance that you'll make a sale
- The probability of selling to an existing customer is 60-70%, while the possibility of selling to a new prospect is only about 5-20%.
As you can see, new customers are essential, but reactivating existing customers is critical to the survival of your company.
3 Customer Reactivation Strategies That Work
Now that you know how vital customer reactivation is, let’s talk about how you can implement it. Here are a few of our favorite approaches:
1. Identify Dormant Customers