Customer retention costs less than lead generation costs
Posted: Mon Jan 20, 2025 5:22 am
The key to growing a subscription business is to drive repeat purchases by upselling more expensive plans or cross-selling add-ons. This is another reason why customer marketing — focusing on current users and marketing to them regularly — is a critical success factor for subscription services.
Have you heard of the 1:5 rule? This principle states that it costs five times more to acquire a new customer than it does to retain an existing one. There’s also the 5:25 rule, which claims that by increasing your customer churn rate by 5%, you can increase your profit margin by 25%.
Generating new leads and converting them into paying customers requires a lot of time and effort, in addition to advertising costs and other marketing costs. On the other hand, it is much easier and less brazil telegram number database expensive to get new purchases from existing customers with whom you already have a relationship. With this logic in mind, customer marketing is an important part of your strategy, no matter what your business is.
What is the relationship between Customer Marketing and Customer Success?
Many people probably think of customer success when they think about spending their time and attention on existing customers. Customer marketing is closely related to customer success, but let’s take a moment to think about this relationship.
What is Customer Success?
Customer Success refers to the systems and organizations that accompany customers in achieving the goals of introducing a product or service.
The Customer Success team’s mission is to follow up with customers after they integrate the solution and guide their use to ensure they meet their goals and achieve results.
And to really build strong customer marketing, you first need to gain your customers’ trust in your company through customer success. You need to show them that your company delivers results and build real human connections with each customer.
Have you heard of the 1:5 rule? This principle states that it costs five times more to acquire a new customer than it does to retain an existing one. There’s also the 5:25 rule, which claims that by increasing your customer churn rate by 5%, you can increase your profit margin by 25%.
Generating new leads and converting them into paying customers requires a lot of time and effort, in addition to advertising costs and other marketing costs. On the other hand, it is much easier and less brazil telegram number database expensive to get new purchases from existing customers with whom you already have a relationship. With this logic in mind, customer marketing is an important part of your strategy, no matter what your business is.
What is the relationship between Customer Marketing and Customer Success?
Many people probably think of customer success when they think about spending their time and attention on existing customers. Customer marketing is closely related to customer success, but let’s take a moment to think about this relationship.
What is Customer Success?
Customer Success refers to the systems and organizations that accompany customers in achieving the goals of introducing a product or service.
The Customer Success team’s mission is to follow up with customers after they integrate the solution and guide their use to ensure they meet their goals and achieve results.
And to really build strong customer marketing, you first need to gain your customers’ trust in your company through customer success. You need to show them that your company delivers results and build real human connections with each customer.