Is it always harder to find new customers than it is to retain old ones or does it depend on the business you’re in?
I think it depend on the business we are in. Acquiring new customers is a driving force that motivates all companies, but it’s not without its limitations. For a business to thrive, it must eventually shift its focus to retaining the customers it’s acquired, rather than only landing new ones. A client or customer who stays with our company over time gives us the chance to provide more ongoing value, develop more personalized content, nurture a brand advocate, gain referrals, and earn positive word-of-mouth marketing. All of this is in addition to the fact that it costs less to retain an existing customer than it does to acquire a new one, making it a smart move for our customers and our bottom line to keep current customers coming back. Research has shown that a 5 percent increase in customer retention rates can increase profits by anywhere from 25 to 95 percent. In addition, not only does it cost five times more to acquire a new customer than to retain a current one, but it also costs 16 times more to get new customers to the same spending level as existing ones. The strategies for retaining customers are very different from the ones used to acquire new customers. While customer acquisition relies on our ability to reach and attract new audiences, customer retention is more about ongoing engagement, personalization, and value provided over time.
While acquiring new customers is a fantastic way of building up a strong client base, its effects are limited without effective marketing that keeps customers coming back to you over time. Find ways to make our customers feel special and important through our messaging and offers. Doing so will help us build strong brand advocates and give our company the competitive edge it needs to continue to grow and succeed.
Myler, larry. (June 8,2016). Acquiring New Customers Is Important, But Retaining Them Accelerates Profitable Growth.
2: Joan Rifenburg posted Feb 5, 2020 11:04 PM
- Think about some of your friends and what you have discovered by visiting their homes. Do they buy different things than you do? If so, why? How might a company distinguish you from them in terms of its targeting? I do buy different things than my friends. This is because I am Kenya and I like to make Kenyan food which is a little bit different from what my friends eat. The company might distinguish me from other customers by identifying why I buy those products. That way they would better understand what their products have to offer me. They could also segment my market and research it. These are the three steps they could take to distinguish me from other consumers (Magee, 2015).
- Is it always harder to find new customers than it is to retain old ones or does it depend on the business you’re in? According to Amy Gallo (2014), Depending on which study you believe, and what industry youre in, acquiring a new customer is anywhere from five to 25 times more expensive than retaining an existing one (para.1). This is because you spend time and resources going out to find new customers while to retain an old one, you just have to keep them happy. Retaining the right customer is valuable.
- Does one-to-one marketing have to be expensive? How can small organizations interact with their customers in a cost-effective way? One-to-one marketing (also expressed as 1:1 marketing)is a strategy that focuses on building customer relationships. This strategy emphasizes the importance of developing personalized relationships with customers (Rosenthal, 2018). Since it focuses on customer relationship, it can be less expensive because the company just has to retain a customer. It increases consumer loyalty. There are a few ways that small organizations can interact with their consumers in a cost-effective way, they include using of free publicity, communication through social media, building a website for the organization and creating partnerships with other organizations (Carlson, 2020).
- Are large companies better off using multisegment strategies and small companies better off using niche strategies? Why or why not? According to Anna Mar (2013), Segments tend to be bigger while niche can be very small. Niche marketing is a strategy that is used by small companies in order to avoid competing with a market leader. It avoids direct competition with large competitors. Large companies are better of using multi segmenting because it is a strategy that is used by large companies that are looking for new sources to grow. They might use this strategy to find new customers. Large companies can use the segments to engage in competition and to also defend themselves against niche competition.
- How have companies such as JCPenney and Sears tried to change their position (reposition their stores)? They tried to focus on discounts, sales and promotions. They would highly mark-up products and then immediately offer discounts through promotions and coupons. In other words, they positioned themselves with the bargain hunter community of individuals. Their advertisements and promotions were price-focused. They also tried to up and modernize the stores. They refurbished them and did away with the coupons and discounts (Mourdoukoutas, 2013).
- Do you think hotel companies have segmented the market too much and confused customers? I think they have segmented it too much. The marketing strategies for hotel companies need to change. Hotels need to communicate with potential hotel customers in a targeted way. To feel more personal and probably put the customers in small niche market segments.
Carlson, R. (2020, January 21). 8 Cost-Effective Ways to Market Your Small Business. Retrieved from https://www.thebalancesmb.com/market-small-business-at-low-cost-393408
Gallo, A. (2014, October 29). The Value of Keeping the Right Customers. Retrieved from https://hbr.org/2014/10/the-value-of-keeping-the-right-customers
Magee, S. (2015, July 24). How to Identify a Target Market and Prepare a Customer Profile. Retrieved from https://edwardlowe.org/how-to-identify-a-target-market-and-prepare-a-customer-profile/
Mar, A. (2013, May 6). Niche vs Segment: What’s The Difference? Retrieved from https://business.simplicable.com/business/new/market-niche-vs-market-segment
Mourdoukoutas, P. (2013, November 20). Sears And J.C. Penney: A Tale Of Two Fading American Retail Icons. Retrieved from https://www.forbes.com/sites/panosmourdoukoutas/2013/11/19/sears-and-j-c-penney-a-tale-of-two-fading-american-retail-icons/#64b642ed7b89
Rosenthal, M. (2018, March 5). One-to-One Marketing definition. Retrieved from https://www.openpr.com/wiki/one-to-one-marketing
3: James Weathers posted Feb 5, 2020 9:55 PM
Other than the fact that currently their homes are much cleaner than mine due to all these classes I am taking, plus work, and a 15 year old teenager who listens to every word I say (sike) . I have discovered yes we are each extremely different and we purchase things that we like, things that make us feel secure and comfortable, for example my man cave has everything I need, team colors, big screen tv, theater chairs cameras lights, video games and computer. Spending is one way, Appearance is another way to target. If they saw or studied my overall spending patterns, marketers would quickly realize luxury items cars jewelry, designer clothes, do not appeal to me. Cruises and Traveling is what gets me into trouble. All my favorite sport teams is another weakness.
According to this week reading finding and attracting new customers is far more difficult than retaining your current customers. You have to make many changes you make when you switch over to new product. Morris states that 73% of satisfied customers will recommend the product to someone else
When it comes to one on one marketing it does not have to be expensive. Evaluating you efforts, gathering information like studying buying patterns talking to customers none of these are expensive just in building a customer management relationship,
Unlike One on one Multisegmetal is more expensive Multisegmental strategies consist of advertising with different hooks trying to get folks from different markets to buy product (Wroblewski, 2018) I use the example here the NFL during Superbowl many are drawn to the game, others for the Halftime show, others for the commercial event, Niche strategies try to get a selective group starting out building a brand, Large companies have the resources to use Multisegmetal strategies Smaller comes Niche audience there is less competition, its more affordable, it creates a loyal target population and easier to aim audience. (Hampton n.d)
Jc Penny focused its operations all over the nation in shopping malls in suburban area focusing on having the brand around high customer traffic. Basing a pricing strategy on its name Penney, it has the customer like me thinking its cost nothing. It sends emails to customers on sales discounts holidays. (Bhasin, 2018) Now that I think about it as a little kid in Jacksonville Florida I never saw this store outside of a mall.
I dont think Hotel companies have segmented the market too much. I think the idea is to get the specific groups in but there are so many groups of people, with so many likes and dislikes, plus dealing with competition but I will say have you noticed if a city Is having a major event all hotels sell out. The consumer someone like me after a few signs of no Vacancy just wants a room.