Leveraging Existing Customers For Business Growth: 5 Strategies To Look Into

Leveraging Existing Customers For Business Growth: 5 Strategies To Look Into

A business model relying solely on lead generation isn’t sustainable. Remember, getting new leads is expensive. You might be profitable with this model, but, you won’t scale fast enough to keep up with the competition. 

Instead of just pouring your entire budget on lead generation, you should also focus on nurturing existing customers. Trust is already built. They’re more likely to spend. And, they’re more likely to spend more. Here’s why! 

Why Should You Give Importance to Existing Customers?

A customer’s buying journey follows a long and winding sales funnel. Time, effort, and resources are poured into each sale. Don’t let all of that go to waste.

Nurturing existing customers costs less and gains more profits. If you provide care for customers after the sale, you get the following benefits:

Increased Customer Retention and Loyalty

Nurturing existing customers is crucial for strengthening relationships. Exceptional service, personalized communication, and relevant offers build trust and loyalty.

Satisfied customers stay longer, reducing churn, and could even end up becoming advocates for your brand. And, what do advocates do? They promote brands through word-of-mouth. 

According to studies, word-of-mouth advertising can be five times more effective than paid advertising. It takes time to ramp up, but the results will literally speak for themselves. 

Higher Customer Lifetime Value (CLV):

A CLV is a customer’s total spending during their relationship with a business. If a customer buys an OLED TV for $2000 and never bought another thing from you, that’s a CLV of $2000. 

But, what if two weeks after the sale, you sent an email for a 20% discount on a sound bar? That’s a perfect combination for a new TV! If the customer bought it, his CLV just increased. 

It’s this repeated cycle of providing value that helps you gain value. Providing value helps your brand turn customers into loyal customers—these customers generate the most revenue.

Cost Savings and Increased Profitability

As mentioned earlier, nurturing existing customers costs significantly less than finding new ones. Reduced acquisition costs allow your businesses to allocate resources more efficiently. 

Forrester Research conducted a study suggesting lead nurturing can increase sales by 50% at a 33% lower cost compared to lead generation. 

Valuable Feedback and Insights

Testimonials, comments, reviews—what do these have in common? All of these can make or break a business. In order to grow, businesses need to take customer feedback into account. 

Nurturing customers also means answering pressing questions, taking suggestions into account, and developing solutions for a better user experience. 

Stronger Competitive Advantage

Exceptional customer experience translates into revenue. The stronger the customer relationship you have, the harder it is for competitors to pull them away.

To scale this in the digital world, we automate personalization, offer proactive support, and wear our value proposition on our sleeve. 

Leveraging Existing Customers To Grow Your Business

Getting loyal customers is no easy feat. With the right nudges, you can boost the average order value (AOV) of each existing customer.

In fact, studies show that x percent of sales for eCommerce are from existing customers. If you want to leverage existing customers to scale your business faster, follow these actionable best practices: 

Up-Sell and Cross Sell

Let’s say your customer has a phone inside their cart. But, based on purchase history, his average spending is close to the price of the phone. That’s a perfect opportunity for an upsell! 

It’s when you offer an upgraded version of a product to a customer. In our example, we can upsell the customer the latest model of the same brand. 

Cross-selling on the other hand is selling related items that they’re likely to buy. If the customer just bought a phone, maybe they’d want a phone case to protect it. 

Email Nurturing Campaigns

The best way to keep customers coming back to your business is to be top of mind. You can easily do this with email nurturing campaigns.

Send your existing customers discounts, personalized promos, and exciting updates. Keep your customers in the loop. Make them feel like they’re part of a larger community. 

Streamline this campaign with the help of email automation. Use CRM tools to gather data for personalization.

User-Generated Content (UGC)

When people talk about your brand or products, that’s an example of user-generated content (UGC). It’s one of the most cost-effective, sustainable, and powerful tools for marketing. 

From the perspective of potential buyers, UGC can be seen as more authentic as compared to paid ads. This makes it the type of marketing that’s more likely to convert. 

For this reason, lots of brands reach out to influencers and key opinion leaders through partnership marketing. Doing so boosts brand awareness, engagement, and ultimately—sales.

Referral Programs

Your loyal customers are already likely to promote your business to their peers. Why not incentivize them? Leverage existing and new customers by utilizing word-of-mouth marketing.

This promotes a business’s organic growth. Have freebies, discounts, or reward points for each referral.  Growsurf did a study suggesting that referred customers are 3x more likely to convert

And, that’s not just for the short term. A similar study from Wharton revealed that referral-based customers have 16% higher lifetime value than non-referred ones. 

Personalized Retention Strategies

Are regulars not coming back to shop with you? Your business is struggling with retention issues. As a business, you can’t just say c’est la vie. 

Studies from Smile.io suggests loyal customers spend twice as much as 90% of your other customers. And, 35% of an e-commerce revenue is generated from 5% of customers. 

This means the need for personalized retention strategies is just as important as lead generation and nurturing. Here are a few tactics you can use to improve retention rates:

  • Increased personalization.
  • Frequent check-ins.
  • Loyalty programs.
  • Better customer support.
  • Post-purchase follow-ups.

Key Takeaways

A business model relying solely on lead generation isn’t sustainable. Remember, getting new leads is expensive. You might be profitable with this model, but, you won’t scale fast enough. The best way to scale is by leveraging existing customers to grow your business. Here are five strategies for just that:

  • Up-selling and cross-selling campaigns. 
  • Email nurturing campaigns.
  • User-generated content (UGC).
  • Referral programs. 
  • Personalized retention strategies.