Taking care of your core customers is a must. But this can be difficult when your business needs to attract new audiences. How can you avoid neglecting one or the other? Let’s take a moment to pause and reflect.
- Your core customers are one of your most valuable assets.
- They already know what’s great about your brand. And, if you’re lucky, they play the role of brand advocate with friends and family.
- They’re also generally more willing to pay you more for premium products and services.
- Loyal customers can also make a huge difference to the bottom line. Decades of data show that increasing retention by 5% can increase profits from 25% to 125%.
- Despite all these benefits, we marketers tend to get bored of focusing on the same old customers. We get swept away by the excitement of chasing new audiences—even though winning them over can be costly.
- Sometimes broadening your audience is worth the extra cost. If the business is aiming to tap into new markets, build brand awareness or stay relevant with younger generations, then new customers are a must.
- But tread carefully when searching for new customers. Otherwise, you risk alienating your loyal ones. Or finding your brand tangled in controversy.
- Remember when JC Penney did away with their coupons and sales to become more hip and attract new customers? This led to a mass exodus of the brand’s existing fans—and one of the biggest retail disasters in history.
- So how can you find a balance between keeping your existing customers and broadening your audience?
- Start with your mindset. Think of your customers as a balanced portfolio—a healthy mix of new and old.
- To keep this balance right, give equal weight to growth metrics and retention metrics. This can be harder than it sounds—growth metrics are often more visible. And exciting to executives.
- Of course, it’s also important to look beyond metrics and put in the work to really understand what customers need. Different audiences will bring different needs and travel different paths.
- As you work to balance your customer portfolio, be mindful of maintaining the trust you’ve built with existing customers. Trust is vital for strong customer relationships. It’s also hard to build and easy to break.
- If you’re rolling out changes to your product or service, do it gradually to protect the trust you’ve built.
- Sudden changes can be confusing to your core customers. Help them understand how the change is connected to the brand and won’t disrupt their user experience.
- If they react negatively, be proactive in listening to and addressing their feedback.
- When offering discounts, bonuses or rewards to new customers, consider doing the same for loyalists. Companies that focus on wooing new customers risk upsetting existing ones—or even losing them to competitors.
- This challenge is perennial and cuts to the heart of what business is all about. As Mark Ritson puts it: “The purpose of the business is to create and keep a customer.”
- Achieving this purpose is all about keeping the balance right.
