As a small business owner, the majority of your marketing and advertising budget should be focused on who: new customers or loyal customers?
Our newest infographic takes a deeper look at this age-old debate and has some surprising facts about loyal customers and your business. You may be leaving money on the table!
Angela Prilliman is FiveStars’ Content Marketing Strategist and the Editor in Chief for the FiveStars Loyalty small business blog, where she likes to sneak in animated .gifs when she can. Chat with Angela via Twitter or Google+.
What is Your Current Marketing Focus?
Surprising facts about customer loyalty marketing and your small business – you may be leaving revenue on the table.
63% of marketers think that new customer acquisition is the most important advertising goal, but does a focus on attracting new customers really lead to a more profitable business?
New Customers vs. Loyal Customers
These guys are your loyal customers (people who have visited at least 10 times). They account for about 20% of your customers. But that 20% drives 80% of your total revenue and 72% of total visits to your business, and depending on the vertical, loyal customers can account for up to 84% of total visits.
Over their lifetime, loyal customers, spend 10 times more. Yeah. You heard us.
New Customer Stats
- New customers are also more price conscious: the probability of getting a sale from a brand new customer is 5-20%.
- The average conversion rate (actual sales) from promotions sent to new customers is less than 1%.
- Only 36% of daily deal customers will spend more than the discounted price of the deal.
- Less than 20% of daily deals customers will return and pay full price for items.
Loyal Customer Stats
- Loyal customers have a greater lifetime value: They spend more over time and generate more revenue.
- VIP and loyalty program members are 70% more likely to spread the word about your business.
- Loyal customers like to hear from you: 65% want stores they frequent to email them coupons and promotions.
- Because your loyal customers know your business, the probability of making an additional sale, or upselling, is 60-70%.
That’s why the most efficient way to grow and get more revenue for your business is to implement a modern digital loyalty program.
3 Reasons Why a Loyalty Program is the Best Way to Grow Your Business
1. They help you track your VIPs.
Know who they are, so you can improve your customer service and reward them for their frequent visits.
2. They increase customer visits by 12-44%.
If you structure your loyalty program effectively, you will see a lift in visits and revenue from your enrolled customers.
3. They can turn new or casual customers into loyal ones.
The right digital loyalty program lets you easily store all your customers’ info, and then target customer groups and persuade them to come back.
Focus on your loyal customers to make sure you aren’t leaving extra revenue on the table.
- KISSmetrics – http://blog.kissmetrics.com/retaining-customers/
- Inmar – https://www.inmar.com/Pages/InmarDocument/the-latest-on-coupon-redemption-and-distribution.aspx
- Colloquy – http://www.colloquy.com/files/2011-COLLOQUY-Talk-Talk-White-Paper.pdf
- FiveStars Customer Loyalty Data Study
- Marketing Metrics – http://returnonbehavior.com/2010/10/50-facts-about-customer-experience-for-2011/
- Utpal Dholakia – Rice University Study
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