A study by Gartner revealed that a five percent decrease in attrition can yield an in- crease between 25 to 95 percent in bottom-line profits. The overwhelming traditional view of marketing is the process of acquiring prospective customers. It is not uncommon to find companies spending 80 percent of their marketing budgets on getting consumers into the purchase funnel. We’ve become so preoccupied with generating awareness and interest that we tend to forget about our most important asset, our current customers.
We need to flip that ratio on traditional marketing. We need to heed Pareto’s Law and determine the 20 percent of traditional marketing we are doing that is generating the strongest ROI. Once you’ve earmarked that vital 20 percent, it’s time to focus a majority of the remaining 80 percent squarely on current customers. By putting the focus on your current customers, you eliminate waste, drive differentiation, and generate the following three benefits:
• Reduce attrition
• Increase loyalty
• Drive positive word of mouth