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The Harvard Business report from 2014 about Customer Lifetime Value shows that acquiring a new customer is anywhere from five to 25 times more expensive than retaining an existing one.
It is not a secret that nurturing existing customers is important to the long-term financial success of a company. It costs considerably less to keep an existing customer than to acquire a new one.
London School of Economics research shows that companies with a very good customer reputation grow four times more swiftly than other companies.
Customer Retention methods are quite useful to keep your existing clients and get new ones by the way. The research from Frederick Reichheld (Bain & Company) shows increasing customer retention rates by 5% increases profits by 25% to 95%. Businesses can cut their costs by building loyal relationships with customers and other stakeholders.
Across the wide range of businesses, customers generate increasing profit each year they stay with the company.
How do loyal relationships translate into cost savings? First, consider the cost of serving a long-standing customer versus the cost of courting one. But the one long standing customer brings much more benefit:
A return customer tends to buy more from a company over time and brings more income to the business. The operating costs to serve them decline (Administration, delivery, orders, customer service,…) and they’ll often pay a premium to continue to do business with you rather than switch to a competitor with whom they’re neither familiar nor comfortable. After a number of good experiences, the customer will refer others to your company which decrease your number of new customers.
In the best case, the company keeps their current customers and get new ones by word of mouth and recommendations. The process begins again, the new customers become return customers and so on. This is how to grow the customer number.
word of mouth
New Zealand research shows that when people have a great customer experience:
  • 80% tell on average nine other people
  • More than one-third give you more business
  • 55% recommend you
Find out, how to create customer experience so good it inspires people to tell others, which will bring in new customers. In essence this is free advertising.
In real life, not every customer has potential to be profitable and long-standing. Cost-effectiveness dictates that you segment clients to identify the subset that holds this potential, so you can target your investment in relationship-building. Your existing customer base is a gold mine of not just sales opportunities, but goodwill and free promotion as well. Plus, having lots of happy customers makes your job much easier!
The secrets of the loyalty leaders (by Bain & Company, Inc):
  • Modify customer-acquisition incentives:
Reward your sales teams and marketing channels for acquiring customers that stick. Consider commission or bonus reductions if customers defect before 18 months.
  • Reallocate marketing Investments:
Systematically rank all of your customer acquisition campaigns on the basis of their yield of loyal customers. Shift resources towards programs that attract the richest mix of loyal customers. (Many firms today are wasting half their marketing expenses on disloyal customers who will never stick around long enough to pay back the acquisition investment.)
  • Identify ways to help underperformers:
Develop annual relationship report cards on suppliers and dealers (and customers and employees) with as much care as you give to annual reports for investors. Test a 360-degree feedback system, starting with senior managers and rolling out to all employees.
  • Use the internet:
Loyalty leaders have shifted almost half of their customer transactions to the Web. Make sure your Web site is so simple to use that many customers will prefer this faster and cheaper alternative. No company is immune to the pressures of the market. But companies that focus on building loyal relationships that by their very nature keep costs to a minimum are far better positioned to remain strong in the face of market turbulence.


Often people give up looking for something, because they think it is in vain.
One is the story about the “lucky carrot” that sounds like a fairy tale, but happened just recently in Canada. There was literally Gold beneath their feet.
In 2004 a woman was weeding in her garden at the family farm in Armena, Alberta, when she lost her engagement ring. It slipped from her finger and disappeared in the ground. She couldn’t find it, looking high and low on her hands and knees. Finally, she gave up and was never expecting to see it again.

After 14 years, the ring appeared in the same garden but in a way no body expected. That was until her daughter-in-law pulled it from the soil, attached to a carrot. The carrot had grown perfectly into the ring.
The woman never anticipated, how special this ring would be, and to feature in the news around the world. She has been reunited with her long-lost diamond engagement ring, and that is much more important for her. So, the Gold was beneath her feet for fourteen years undetected!!
Companies and Businesses have Gold in their Staff & Customers however never go mining for that Gold. How much potential value could be sitting in your Business untapped.

65 percent of a company’s business comes from existing customers. 80 percent of your future profits will come from just 20 percent of your existing customers.

If you don’t nurture (tend to your garden) your employees & customers then..

It has been said “what we sow, we shall reap”. Don’t wait 14 years (not even one year) to find out you have untouched Gold beneath your feet.

Your Business Angel specialize in helping Clients create and implement Campaigns to gain their Gold beneath their feet. Let’s work together to find your fair share.


The average repeat customer spends 67 percent more in months 31-36 of their relationship with a business than they do in months 0-6.
According to the Rosetta Consulting study, highly-engaged customers buy 90 percent more often and spend 60 percent more per transaction.

The Retentionomics study by Forbes from 2016 points out important results about Customer Retention. Forbes is a global media company, focusing on business, investing, technology, entrepreneurship, leadership and lifestyle.
The report, which was based on a global study of 300 CEOs and media and retail executives, shows that companies that increase their investments in customer retention, realize important advantages in increasing market share, managing customer churn and optimizing acquisition over those that invest primarily in customer acquisition.

One of the notable finding is that retailers and publishers that increased their spending on retention in the last 1-3 years had a near 200% higher possibility of increasing their market share in the last year over those spending more on acquisition. More details about the results you can read in the original article here.

Neil Lustig, CEO, Sailthru: “Too often, executives and marketers focus their efforts on short-term growth and we’re seeing the impact of that in retail and media company earnings reports. There are many studies that document the potential of retention, but none that dive into how well retail and media companies
understand the economics of retention. The Retentionomics study validates that focusing on high-quality customers is a more efficient way to reach sales and revenue goals than simply delivering new customers. The most successful modern marketers invest in and set specific retention goals, measure the value of their valued customers through that lens, and use that data to inform their acquisition strategies and deliver sustained profitable growth.”

An important result from the Retentionomics research is the role that personalization plays in the whole marketing strategy. It has been proven to increase the total percentage of customers, in addition to increasing the value and revenue derived from those audiences.


In 1998, Kodak had 170,000 employees and sold 85% of all photo paper worldwide. Within just a few years, their business model disappeared and they went bankrupt. What happened to Kodak will happen in a lot of industries in the next 10 years – and most people don’t see it coming. Did you think in 1998 that 3 years later you would hardly ever take pictures on paper film again? Yet digital cameras were invented in 1975. So as with all exponential technologies, it was a disappointment for a long time, before it became way superior and got mainstream in only a few short years.

Welcome to the 4th Industrial Revolution. Welcome to the Exponential Age.

Software will disrupt most traditional industries in the next 5-10 years.
Uber is just a software tool, they don’t own any cars, and are now the biggest taxi company in the world. Airbnb is now the biggest hotel company in the world, although they don’t own any properties. Artificial Intelligence: Computers become exponentially better in understanding the world. This year, a computer beat the best Go player in the world, 10 years earlier than expected.

The price of the cheapest 3D printer came down from $18,000 to $400 within 10 years. In the same time, it became 100 times faster. All major shoe companies started 3D printing shoes. Spare airplane parts are already 3D printed in remote airports. The space station now has a printer that eliminates the need for the large number of spare parts they used to have in the past.At the end of this year, new smart phones will have 3D scanning possibilities. You can then 3D scan your feet and print your perfect shoe at home. In China, they already 3D printed a complete 6-storey office building.

Longevity: Right now, the average life span increases by 3 months per year. Four years ago, the life span used to be 79 years, now it’s 80 years. The increase itself is increasing and by 2036, there will be more than one year increase per year. So we all might live for a long, long time, probably way more than 100.

The only constant now, is change and as illustrated it is the rate of change that will continue to challenge us and how we do business. Business owners to survive must be aware of and factor these changes into what they do. The best businesses will have a dedicated focus/thinking on these changes and take full advantage of the opportunities presented each year. Most will say daunting the top achievers will say exciting.