Customer Acquisition Vs. Customer Retention
Customer marketing is extremely important for businesses, and pizza shops are no exception. How you greet, treat, communicate with, and reward your customers is as important for your business as the cheese on your pizza. It can make or break your shop’s success. With that said, there are two specific ways to take on customer marketing – Customer Loyalty Marketing and New Customer Marketing (also described as Customer Retention vs. Customer Acquisition). For our 3rd slice of the Pizza Marketing 101 series, we’re looking at both of these strategies, when they work best, and how they complement each other. Let’s dive in.
What is Customer Marketing?
New customers are fantastic. It’s always exciting when someone new walks through the doors of your shop and you can greet, excite, impress, and turn them into a loyal pizza eater. But, those loyal pizza fans of yours who’ve been walking through your doors for years are also the bread and butter (or should we say the cheese and sauce?) of your business. Both have importance and both will keep your shop running for years – even decades – to come.
Customer loyalty marketing, or customer retention, are the tactics you use to keep loyal customers coming back to your shop. The most recognizable customer retention tool is a rewards or loyalty program. Discounts and recognition help keep longtime customers coming back, showing them their business is acknowledged and appreciated. Other tactics include surprise discounts or offers, setting expectations for future offerings, building trust, continually improving customer service, measuring customer lifetime value, using personalization in communications, and utilizing surveys to continually satisfy these ongoing customers. Although customer loyalty marketing can sometimes be undervalued, it shouldn’t be, especially since it costs “five times as much to attract a new customer, then to keep an existing one.” Additionally, improving customer retention by a mere 5% can increase profits 25% – 95%, and the probability of converting an existing customer into an ongoing customer is 60% – 70%, compared to a 5% – 20% chance of converting someone into a new lead.
That being said, customer acquisition is of course still important. To keep a business growing like dough in a wood fire oven, you need a steady increase in new pizza fans. New customer marketing, or customer acquisition, are the tactics you use to gain new patrons. Just like customer loyalty marketing, new customer marketing requires lots of strategy and thought. The most recognizable tactics and tools for this type of customer marketing are billboards, commercials, print and digital ads, direct mail, website, content marketing, social media, search marketing, email marketing, and so-on. Whatever is attracting new customers and convincing them to pick you above competitors is customer acquisition marketing.
What Customer Marketing Tactic Should My Shop Focus On?
As we said before, although acquiring new customers to help your business grow is important, your lifelong customers are cheaper to keep and easier to please. With just a bit of marketing and some offerings, loyal customers will continue to support your business through thick and thin (crust). “U.S. companies lose $136.8 billion per year due to avoidable consumer switching.” Don’t let your loyal customers switch to the shop down the road. When it comes to pizza shops, it’s best to first and foremost always ensure that your current customers are listened to and focused on.
New customers, on the other hand, can sometimes be easy to sell a slice to, but aren’t always easy to keep. Although this tactic may not be quite as easy as customer retention, it’s still a vital part of your shop’s growth. You don’t want to overspend time and money on customer acquisition – but it doesn’t have to break the bank. Customizable tools like ZaHub can help you find and obtain new customers without spending a ton on marketing.
How Can I Use Both Tactics Together?
Focusing on just one or the other and missing out on either tactic can be a major miss. But, using both in unison – cooking two pizzas in one oven – can be a major win. All customer marketing tactics should complement each other. Once you acquire a new customer, you’ll need to use the right tools and strategies to keep them.
Marketing messaging across both tactics also needs to flow cohesively to ensure customers grow to recognize, know, and love your shop’s brand and employees. For example: Let’s say a potential customer gets a ton of offers sent to them up front. But, once they’re a “loyal” customer, they aren’t seeing any offers coming their way. They’ll feel forgotten about. This inconsistency could cause them to find another shop to call home. Another example? You send a ton of direct mail messaging to current, loyal customers, but you aren’t taking the extra step to send slightly altered mail to potential new customers (a.k.a new movers). You’ll please your current customers, but you’ll miss out on easily acquiring new ones.
The bottom line? Using at least a few tools for both acquisition and retention is essential. Relationships are, like we said, the cheese and sauce of your pizza business. It’s best to know when, where, and how to use these strategies so you can decide what’s best based on your allotted budget, and customize appropriately.
Ready to take your next customer acquisition or retention campaigns to the next level with a few mouse clicks – and zero effort? Get started with ZaHub today.