Why New Customers Are So Valuable to Your Business

David Hill

David Hill About The Author

Jul 21, 2020 8:55:00 AM

Why New Customers Are So Valuable to Your Business

A steady influx of new customers is the lifeblood of any business. New customers increase revenues and contribute to sustainable growth. Moreover, turning new customers into loyal customers is one of the best marketing investments that a company can make. Happy consumers often become strong advocates for your brand.

An illustration of the value a new customer often delivers could go as follows: a construction company does some minor renovations for a new client. The new client, who happens to be a real estate developer, is so pleased with the construction company's work that he decides to hire them to work on many of his future projects. In the end, the real estate developer provides a large proportion of the company's business for years to come. In this scenario, a new customer can become extremely valuable.

It's true the acquisition of a single new customer may not lead to such dramatic results for a given company. Nevertheless, the fact remains that an infusion of new customers is always a net plus.

What New Customers Mean for Your Business

There are several benefits that come from a concentrated initiative to acquire new customers. The following list contains a sampling of such benefits:

  • An influx of new business. One of the primary and most obvious, immediate benefits of new customer acquisition is the corresponding increase in sales and profitability. Gaining a wide consumer base is especially important for product-based companies, as opposed to subscription or service-oriented businesses.
  • The ability to build new relations with fresh, new customers. While the act of acquiring a new customer is in itself important, it also comes with the opportunity to forge an ongoing relationship with the customer. This should be an essential consideration for any business since a customer's lifetime value is far greater than the value of a single purchase.
  • The possibility of turning new customers into loyal customers. New customers are good; loyal customers are better. Every time a company gains a new customer, there is also the possibility of gaining a loyal client that will lean towards the brand in all future purchase decisions.
  • Expanded reach for your business. Whether a business owner wants to expand his consumer base in the current market or penetrate into new sectors, a customer acquisition campaign can work wonders for the business' reach and exposure.
  • A gauge for the effectiveness of your marketing and advertising. The ultimate goal of marketing and advertising is customer acquisition. Thus, a company's customer acquisition metrics serve as an excellent gauge for how effective its current marketing tactics are, and where they could be improved.
  • The development of brand advocates. Happy, loyal customers will frequently share their good experiences with friends, family members, and colleagues. In a sense, these brand advocates are the best marketers a company could have: they are passionate about the company, recommend the organization to others, and have no impact on payroll. When a business provides world-class customer service, it encourages new customers to remain loyal to the brand, and become brand advocates.

Taken in sum, all of the above points indicate that growing the customer base is one of the most effective and sustainable ways to grow the business.

How to Turn New Customers Into Loyal Customers

What can be done to not only acquire new customers but ensure that they become loyal brand advocates? One of the biggest keys is providing high-quality customer service. It's said that customer experience is the new battleground for many businesses. For instance, one study found that 75% of customers prefer to buy from a company that knows their name, purchase history, preferences, and makes recommendations for them based on those preferences. It is imperative that forward-looking companies streamline their customer service processes into a seamless, frictionless, delightful experience for each new customer.

That is extremely important because strong customer retention can drive strong customer acquisition. Research indicates that word-of-mouth marketing is wildly effective, with approximately 90% of consumers putting their faith in recommendations from friends or family. A customer-centric organization that focuses on delivering superior customer service can thus promote positive word-of-mouth marketing within their current consumer base.

The Importance of New Customers

New customers are an essential driver for any business. They generate more robust streams of revenue, augment marketing and advertising strategies and yield high lifetime value. With such factors in mind, it's important for any forward-looking company to dedicate adequate resources to customer acquisition. Many business owners have found that partnering with an experienced media partner has also been an invaluable aid in their quest to gain new, satisfied, and loyal customers. They thus leverage the power of bringing in new customers to grow their business and achieve a sustainable model for future success.

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Topics: Marketing ROI