First of all, a company should ask itself how profitable new investments really are. What costs does reaching a goal entail? Companies can answer this best when they know their customers’ value. Defining this figure is often tricky to do, especially when it comes to existing customers—which is why many companies focus on new customer acquisition. For example, when a new customer buys a car, the result is relatively easy to measure. Whether the same customer buys another vehicle from the same manufacturer ten years later, however, is often difficult to tell—even with properly managed CRM!
“It is five times more expensive to acquire a new customer than to keep an existing one.”
– VNR Verlag für die Deutsche Wirtschaft AG
Because new customer acquisition requires much higher investments compared to retaining existing ones, customer loyalty programs are becoming increasingly popular. When a company is aware of its customers’ value, then it should set strategic goals to drive active customer loyalty and also provide the special service associated with it. With the clarification that these goals bring, it is relatively simple to develop a customer loyalty concept for use on the customer journey.