APRIL 20208IN MY OPINIONvery business is aware that their client base is the life-line of the company. A fresh stream of new customers means the potential to grow the business further. So most compa-nies interact regularly with its cus-tomers by sending exciting infor-mation and/or valuable promotions for high brand recall. The more en-gaged a business is with its existing customer, the more likely it is to get referred. Research suggests that it costs five times more to attract a new customer than it does to retain an existing one. A study done by Fred-erick Reichheld of Bain & Company highlights that customer retention rates by 5 per cent increase profits by 25 per cent to 95 per cent. The numbers suggest that a business should focus more on retaining the existing customers than acquiring new ones, meaning, retaining cus-tomers is less costly than acquir-ing new ones. This gives rise to loyalty programs. A loyalty or rewards program works on the principle, "A repeat customer gives and gives more." Having a customer-loyalty plan could help in increasing repeat ETHE CURRENT STATE OF LOYALTY PROGRAMS. WHAT CAN SELLERS DO?A technology savant, Shalini is structuring transformational solutions through technologyBy Shalini Prakash, Investment Advisor, 500 Startups
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