We’ve all heard that it costs a ton more to acquire a new customer versus retain and upsell your current customers. According to Harvard Business Review, “acquiring a new customer is anywhere from 5 to 25 times more expensive than retaining an existing one.” Wow, 5 to 25 times more?! That’s a lot of scratch.
And this applies to a majority of purchasing decisions – large and small.
Why is that? Well let’s see, for starters, you have already put in the work to acquire the customer, and you have, hopefully, achieved some level of brand loyalty. And with that loyalty comes knowledge.
Once a customer makes a purchase, you know something about them. Hopefully you have the data about the purchases from your point of sale system (aka checkout) and now your marketing can become powerful. And thus begins the journey of personalized marketing.
Look at Amazon and their success. Amazon is one of the kings of personalized marketing. Browse the site for two minutes, click on a few items of interest and scroll down the page. You’ll see a section called “Related to items you’ve viewed” which shows you items that are similar to whatever you’ve been looking at. Creepy? Oh yes. Wickedly smart? Hell yes.
You’re seeing personalization at work; Amazon is leveraging behavioral data to make product recommendations in an effort to increase your spend. And based on this Yahoo Finance article, it’s working. In other words, it is extreme personalized marketing.
In this day and age, customers don’t want to be sold to overtly. I don’t want to be overtly sold to. Just like millions of other people, I want a personalized, curated sales experience. Believe me, if you know a few things about me, and you personalize my shopping experience, it’s a lot easier to sell me something.