The desire to add customers and increase market share is undeniable. On the surface, it seems to be the most logical approach to increase profits. However, according to Forbes, building relationships with current clients is important.
Addition and subtraction of clients
Gaining customers is more expensive than maintaining a business agreement with a familiar customer. According to the source, losing a client and simultaneously signing a new contract can still bring profit margins down because of additional costs associated with acquiring new business. The financial costs of marketing and the time-related costs related to building a new relationship keep the one-for-one strategy from being universally successful.
Depending on the state of the industry and market, keeping a consistent customer base can actually increase profits. This becomes possible when more firms enter the market yet there isn't a decline in market share. The implication is that the same percentage of market share yields more profit in a larger market. Additionally, it's possible that new firms in the market caused competitors to lose profit.
It's easier to market fresh products to existing patrons if there is already an established business relationship. A degree of trust between supplier and consumer may lead clients to be more open to trying something new. Forbes recommended making those customers the first place to promote an upcoming product or service.
Entrepreneur compiled a list of ways to maintain clients:
1. Keep in contact. Touch base and asked for feedback after a recent order. Alternatively, check in if they haven't placed an order lately.
2. Mix up channels of communication. Try sending a business greeting card or calling the company if email is the most common form of contact.
3. Individualize the experience for patrons and acknowledge their preferences. It can also be helpful to make notes when a customer mentions something personal, like a recent birthday. This reinforces the degree of commitment to the client. Consider sending personalized business gifts to the most valuable clients.
4. Be responsive to consumers. Really listen when there are complaints and pledge to handle customer relations promptly.
"O.K. or worse service gives the customer the sense of nothing more than a business transaction," Diane Berenbaum, author of How to Talk to Customers, told Bloomberg Businessweek "Excellent service is a personal interaction that builds relationships, encourages repeat business, and gets the customer telling their friends about your company."