When I tell people I have a gift business, I sense that they’re sometimes thinking, “Aw, that’s a cute hobby!” or “Oh, that’s fun!” And I often wonder if people appreciate what a valuable role gifting can play for in a company's marketing program.
For those who work in business, gifting may be something they occasionally think about to say “thank you” when they get a new client, or when the holidays roll around, or maybe when someone gets married or has a baby.. But if you own or manage a business, gifting is something that should be thought of much more strategically than that. Today we’re going to talk about customer retention vs. customer acquisition, and I’m going to show you that a gifting program can actually be used -- like all of your marketing efforts should -- to get a return on your investment.
The most important point that I hope people will consider is that business gifts are a component of your marketing.
I want to preface this by saying that, like with all marketing, there’s no one thing that’s going to be the magic bullet that keeps all of your clients coming back for more. You obviously have to have a product or service that works for them, deliver it efficiently, and service them in a way that meets their needs. But gifting can certainly be one component of a marketing strategy, and one that can be very cost-effective.
There are some very powerful statistics on the costs of retaining existing clients vs. acquiring new ones.
Acquiring a new customer can cost seven times more than retaining an existing customer.
65 percent of the average company’s business comes from existing customers.
This one is big: increasing customer retention by 5% can increase profits from 25-95%.
Loyal customers spend 67% more than new ones.
For most industries, the average customer retention rate is below 20%.
Only 40% of companies have an equal focus on acquisition and retention.
Here are a few more:
One customer experience agency found loyal customers are 5x as likely to repurchase, 5x as likely to forgive, 4x as likely to refer, and 7x as likely to try a new offering.
The success rate of selling to a customer you already have is 60-70%, while the success rate of selling to a new prospect is 5-20%.
And it all makes sense, right? You’ve already done the heavy lifting of getting the customer in the door. It’s just good business on all levels to want to keep them.
When you Google “customer retention,” there are 165 million pages dedicated to the topic, and you’ll find all sorts of great advice on how to do so:. Here are a bunch of the suggestions you’ll find on how to do so:
Engage your clients
Develop personal connections with them
Keep your company top-of-mind
Give a great onboarding experience
Be socially conscious
Reward loyalty (and there are hundreds of thousands of kinds of loyalty programs built exactly for this purpose).
This last one, “Reward loyalty,” is huge…there are hundreds of thousands of loyalty programs built exactly for this purpose. Whether it’s your coffee club where you buy 10 coffees and get one free, or my CVS card that sends me discounts, they are everywhere.
When I really thought about all of this, I realized that most of these ideas can be accomplished through a well-executed gifting program. And, if you have a client who represents several thousand dollars to your business, spending a hundred dollars on a memorable, impactful gift for them should be a solid investment compared with the thousands upon thousands of advertising dollars that are spent by businesses to try and find new customers.
So, let's talk about some of the many reasons that gifting should be a component of your
marketing efforts with clients, employees or business partners.
First, gifting is a perfect way to build engagement and strengthen relationships. Whether that’s with customers, your team or your vendors, chances are that you hope to establish a long-term relationship, and a thoughtful gift is a great way to remind them that you’re not just in it for a sale.
It's a great way to leave your customer with warm feelings toward your company. This is especially important if you’re in a more “transactional” business where you may only be working on one project now, but you’d like them to remember you in the future.
It keeps you top-of-mind. Much like a long-term branding campaign, you want someone to think of you when they have a NEED for what you sell.
It can be a way to educate clients about your business and your brand.
It helps you stand out from the competition. Because gifting isn’t done by all companies, it’s a perfect way to put you head and shoulders above the rest.
On the employee side, it’s a way to reward them for their contributions to the company
It’s also a way to make employees feel noticed and valued, which in turn increases job satisfaction and loyalty.
It’s a perfect way to celebrate successes, milestones and special occasions, whether that be with your client or with your team.
You can also take the opportunity to thank business partners and vendors for contributing to your company’s success.
You can welcome clients or employees to a special event.
Or, on the flip side, it’s a way to engage clients and employees when in-person events are NOT happening, and you're doing something virtual.
It's a reminder to your clients that it’s a pleasure to work with you, thereby encouraging referrals
And, it's an effective way to thank them for previous referrals
When we work with business clients , we'll ask them to consider the goals they have in mind for their gifting program, and we'll work with them on the best ways to represent their brand in a way that is strategic as well as thoughtful.
Are you (or do you know) a business owner, executive, sales manager, HR director or executive assistant who would like to explore the idea of a gifting program for clients or employees? We'd love to have you reach out so that we can discuss the options!
Inquire here today for a free consultation.