Most people understand the importance of selling to your existing customers, or monetizers in a free to play environment, but most efforts and features are built around attracting new customers. That despite the fact that the probability of selling to an existing customer is 60-70 percent while the chance of selling to a new prospect is 5-20 percent, according to Marketing Metrics. A recent online article from Matt Perl called “5 Sexy Rules of Customer Retention,” (better named than any of my posts) discusses five straightforward ways to improve sales to existing users.
Reward your customers
You often give incentives to new users, give repeat customers some reward. As Dan Ariely has written, free is very powerful, so giving your customers something free (with no strings attached) is a very powerful tool. I once wrote how thank you notes can help your business, as they can provide a low cost way to give back something to your customers.
Recognize customers from their online footprint
The goal is to recognize customers automatically when they come into your game or encourage them to register. The less friction involved (if you can identify and track automatically without violating privacy issues), the more customers you can touch in this way. Company or product portals are a strong and deep way to tie together a customer with your brand and if your customer comes to you without any pushing than you are doing a great job.
People are always in a rush and do not want to waste their time filling out forms, dealing with bugs in payment processes, etc. If they forgot the username or password, or have to create a crazy hard password, it is just one more thing they have to do before they finish their task or decide not to. If their credit card number is not validating on a form, they are going to grow impatient or leave. You need to test and re-test your fill rates. Try different names on your form fields to see if you can help people finish them sooner.
VIP treatment via email
It is important that you respect your users in email. You want to communicate with them smartly, creating emails that are relevant to your users and provide value. It is important that the emails seem tailored to the user rather than spam.
Do not be dumb
The fifth of the five sexy rules is don’t be dumb, and I could not agree more. Do not sell your customer list to third parties who sell unrelated products. Your customers are very valuable. Make sure you treat them that way.
Get those repeat sales
If you follow the above rules, you increase the likelihood of bringing your customers back and prompting them to monetize repeatedly. As the costs of getting new customers continues to increase, getting more value from existing users (effectively, increasing their lifetime value (LTV)) is critical to continued success.
- You have a 60-70% chance of selling to an existing customer versus a 5-20% chance of selling to a new customer.
- Among the ways of improving sales from existing customers, critical ones include smart CRM and not being dumb by selling your customer list.
- As the costs of getting new customers continues to increase, increasing the LTV of existing customers is critical to continued success.