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Marketing to existing customers isn’t free

How much of our marketing budgets are targeted at new customers, and how much at existing ones? For many businesses, the thinking goes that both are important, and as selling to existing customers doesn’t cost as much (it avoids wasted advertising and servicing dead-end enquiries), it makes sense that we end up having to spend more money on finding new ones.

That’s fair enough. But are we neglecting existing customers? Whether we decide we need to spend 5% or 50% of our marketing budget on them, when it comes down to it, are we actually doing that? My guess is that if most businesses were to put a number on what they think they ought to spend on getting existing customers to buy more, they’ll probably find out that they spend less than that.

Marketing to existing customers is about building relationships. It involves knowing them well, so that we can tailor our marketing messages to ensure they’re useful and relevant. It involves rewarding their loyalty, maintaining a dialogue and keeping us in mind. These things require specific initiatives and resources. They don’t come without cost.