No matter what industry you specialise be it – Manufacturing, Construction, Recruitment, it is imperative to secure business to make money. The question is; “How do businesses achieve this goal – through constantly winning new business or servicing existing customer accounts?”
It is key to identify and secure new business that’s a given, however many organisations forget that repeat business is just as important! Businesses can win a new customer, fulfil their requirement and that is it – no follow up, no up selling, nothing!
Acquiring a new customer can be a costly experience compared to retaining an existing one. It makes sense when you think about it, you don’t have to spend time and resources going out and finding a new client – you just have to keep the one you have happy!
An interesting article which was published by the Chartered Institute of Marketing detailed a number of sources some including the following:
“65% of a company’s business comes from existing customers, and it costs fives times as much to attract a new customer than to keep an existing one satisfied” Sourced quoted as Gartner
“Conventional business wisdom contends that is costs 10 times as much to obtain a new customer as it does to retain an existing customer.”
Pricing by Profitability: Activity Based Pricing for Competitive Advantage
By John L. Daly (2002), p85.
Published by John Wiley and Sons.
Over the years, more and more organisations employ a dedicated Account Manager purely to manage existing customer accounts to ensure the service levels are being met and all avenues of business with that customer are explored. A vital role in a business in my personal opinion!