It’s not uncommon for companies to focus most, if not all, of their marketing efforts on getting new customers. According to the Harvard Business Review article, “Winning Back Lost Customers,” going after old customers is often more valuable and more worth a companies efforts than going after new customers. A marketing professor at Georgia State Univeristy, V. Kumar, provides three reasons in the article of why companies should focus more energy on lapsed customers:
- Old customers have “demonstrated a need for the service, making them far better prospects than random names on a cold-call list.”
- Previous customers are “familiar with the company, eliminating the need to create brand awareness and educate them about the offering and thus reducing the cost of marketing to them.”
- “Recent technology, particularly more-sophisticated customer databases, allows companies to draw on information about how people used their service the first time around to craft more-successful win-back offers and to identify and go after the most profitable defectors.”
Essentially, lost customers offer a better ROI and are easier to win over than new customers are, especially with today’s technology. If you’ve been spending all your time and energy on growing your business through new customers, it might be time to start looking at lost customers as another major source of growth.