Tuesday, May 1, 2007
Customer Retention Proven Important (Again!)
We all know that 80% of revenue comes from existing customers. Yet, so many marketers focus the lion's share of their budget on acquiring new customers. Of course, it's important to bring in new revenues, but we also need to focus on our existing customer relationships.
See this article from "Business Times" about how one firm, Allied Business Networks, made a conscious decision to dedicate marketing dollars to retaining customers, and growing their overall relationship. The article walks readers through a case study of how Allied changed their focus to customer marketing and how this re-allocation allowed them to reap significant rewards, revenue-wise.
As a result of their new focus on customer marketing, "the company has become profitable and seen its annual revenue grow to $6 million." Just one simple change in direction allowed this business to turn a corner and become profitable. That's powerful.
The other thing I liked about this case study is the fact that Allied incorporated a multi-channel approach. Channels included outbound and inbound telemarketing, e-mail marketing, direct mail and faxes. A good example for us to continuously evaluate our channel approach.
If you've enjoyed this case study, you may also be interested in an RRW Retention Case Study, where we outline our experiences with a leading telecommunications provider who needed to sell as many products as possible to each of their customers. Just let us know if you'd like this Case Study.