Increase Profits by Marketing to Existing Customers

Marketing to existing customers is a tried and true strategy that has been used for decades to increase profits. Yet, many people only do this with a company's main product line, not its entire business. This is an unfortunate mistake because it overlooks the most important business asset: customers. If you can't monetize one area of your business without boosting it in another, then you're missing out on some serious gains.

Marketing to existing customers works by generating new sales through existing customers, which allows you to leverage your marketing dollars. When a customer purchases the extra items or services advertised, the cost is much less than if they had been acquired first-time buyers. It's like having a built-in referral program that works 24/7, 365 days a year. Many companies that have used this method have experienced dramatic increases in profits. Here are some of the benefits you can expect from marketing to existing customers:

1) Get more "bang for your buck." Every business has budget constraints and one of them is dollars available for marketing. Sometimes this has to be spent in such a way that the exact target customer isn't clearly defined. For instance, if you're selling various products through several channels, it's likely that some will be purchased by existing customers. This allows you to leverage marketing dollars across different channels without losing sales or "new customers" from being overlooked.

2) It's easier to sell more products or services. Existing customers are already familiar with your product or service and have decided it's worthwhile for them to purchase it. This means you can quickly expand their use of the product or service by offering related services, upgrades, add-ons and more. It's easier to cross-sell and up-sell to an existing customer than it is to a first time buyer.

3) Marketing campaigns are more efficient. When you're marketing to first-time buyers, the sale must be made from scratch. There's no pre-existing relationship between you and the prospect, which means you have to create it from the ground up. This takes time and resources that could be better spent elsewhere in your business. Existing customers are already familiar with your company and trust what you offer. You can take advantage of this by sending out email blasts, advertising online or placing ads in local publications targeting them specifically as existing customers.

4) Customer service is easier. When a customer already trusts you, it's easier to provide quality customer service. They're more likely to be forgiving if they have an issue with your product or service. This means that you're less likely to lose customers due to poor service and can focus on keeping them happy with added features, discounts or other incentives.

5) Existing customers are a great source of referrals. They've had a positive experience with your business, which means they're willing to share it with others. Often times, existing customers will refer their friends or family members for specific products and services where the company has a strong reputation for excellent customer service and high quality products. In addition, it also makes them a more valuable contact as they're likely to be open to talking about the company, posting opinions or perhaps even writing blog articles.

6) You don't need as many leads. Existing customers will buy your product or service without having to be "sold" on it. Once you've captured their attention and gained their trust, they will become buyers on their own terms. This frees up time and resources that would normally be spent on generating new leads from scratch. You can spend more time and money on converting first-time buyers into repeat customers rather than constantly hunting for new leads.

7) It's easier to get attention for an existing product line or service. When you're already advertising for an existing product or service, it's easier to gain attention for a related product or service. You will already have the customer's attention and trust, so they're more likely to try something new without being afraid of scams and other issues associated with online purchases.

8) Increase your profits. Existing customers are worth more than first time buyers because they cost less to acquire and become repeat customers who you can continue marketing to in the future. They also bring in new business by referring their friends and family, which means higher sales volume compared to simply acquiring new customers on their own merit. There are many tactics you can use that increase profits by marketing to existing customers. Not only that, but you can use this to get new customers without having to spend more money on ads, marketing or other promotional strategies.

9) It's easier for your competitors to compete with you. When you're marketing to existing customers, they will notice your advertising and begin shopping around for your product or service as well. It also makes it easy for them to compare your services with other competitors since they'll often have similar products and services with which they may choose another company based on price comparisons. This can hurt your sales in the short-term because people may switch without taking a long-term view on which service provider is providing the best value. This doesn't happen so much when your marketing to existing customers though because they have already decided to buy your product or service.

10) It's easier for you to get back in the buying cycle. When you're marketing to first-time buyers, you have to get them on board before they know what it is that they want. So, there's a lot of work involved and it takes time for them to make a decision. Once they decide that it's something they want, you have to follow up and make sure that the purchase goes smoothly before they forget about it and move on with their lives. On the other hand, when you're marketing to existing customers, you can establish a baseline of trust with them. You can build on this trust through regular communication or special deals, which means it's easier for them to come back and purchase products and services from you.

Existing customers are worth so much to businesses because they're far more likely to buy your product or service than a first-time buyer would be. It doesn't matter what kind of business you're in — existing customers are always worth the extra time and effort it takes to market to them rather than generating leads from scratch from the beginning. Use these 10 reasons why existing customers are important as a guide for expanding your sales and marketing strategy for your small business today.

Originally written Sep 22, 2012. Last updated Nov 14, 2018.

Increase Profits by Marketing to Existing Customers

Increase Profits by Marketing to Existing Customers

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