The average business spends the majority of their marketing budget on attracting new customers – but that can be a big mistake. To forget about current customers, or underestimate their value, is always to your disadvantage. Return customers are hands-down your best source of income.

Obviously, everyone wants to acquire new customers – but they’re not the bread and butter of your business. Cultivating loyalty from current customers should always be your #1 priority.

It Costs More to Attract a New Customer

In fact, it costs five times as much to attract a new customer than to keep an existing one. That’s huge! From doing market research to running paid ads, bills can stack up fast. Actually, monetary investments are far from the end of your expenses. In addition to financial cost, attracting and retaining new clients takes significant time and effort. In the end, it’s just more profitable to foster loyalty in your current audience.

Marketing to an Existing Customer

Here’s an interesting statistic for you-the probability of selling to an existing customer is 60 – 70%. The probability of selling to a new prospect is 5-20%. If you’ve been doing things right, you’ve likely spent a lot of time building and maintaining relationships with your current customers. Those relationships count for a lot!

When customers have been happy with your products and services in the past, they’re more likely to consider you in the future. We find it’s because they already trust you and are familiar with your values.

Repeat Customers Tend to Spend More Money

Studies have shown that not only are repeat customers more likely to buy from you again, but they’re likely to spend more money per transaction than a new customer would. One study by Bain & Company even showed a direct relationship between the length of time a customer has been shopping with you and how much money they spend. What that means is, a customer who has been with you for two years is probably going to spend more money than one who has been with you for two months. Just one more reason to maintain those relationships!

Happy Customers Offer Free Advertising

Word-of-mouth advertising has always been regarded as the best advertising, and for good reason. Not only are referral customers more likely to purchase from you in the first place, but they’re likely to spend more. This can be attributed to the fact that your current customers have already vetted their friends and acquaintances for you. They’re sending people that they think are a perfect fit for your services. Add to that the money saved on traditional marketing, and a referral incentive program seems like a great idea!

In the end, fostering customer loyalty pays in a variety of ways. Next time you’re thinking of running a new marketing campaign, consider what you can do for your current clients instead.