Retain Your Existing Clients And Increase Profitability

Nineteenth-century Italian economist Vilfredo Pareto invented the now-famous 80-20 marketing principle which states that “80% of your sales come from 20% of your clients”. Even if you check on your current list of clients, you will see that the few key clients you have let you earn as much as the rest of your clients put together.

It's a fact that finding new business leads and clients costs more (as much as 5-10 times more) than retaining your existing clients. This is the reason why a lot of marketers and marketing coaches tout the benefits of retaining your clients after the initial sale. While you can't possibly keep every single client you've sold to, you can identify a few key clients which could lead to long-term profitability. These customers and clients need not even be your biggest buyers, as long as they purchase a lot of your merchandise over a period of time, their value as a client greatly increases.

Retaining clients may not be an easy task, but doing so will not only ensure you of continuous profits, but also help you improve your company and business as a whole. To effectively keep your clients, you have to make sure that you always deliver on everything that you promise each of them, and the benefits from your products and services equal or exceed your prices. Otherwise they would end up with your competitors.
If you are doubtful about whether you can sell new or more products to your customers and clients, take note that you already have critical information about them. You know how much budget they have for a month or a year; you know who are the decision-makers in the corporation and how to contact them; you have information about their existing equipment and can easily figure out when they would need to purchase a new one; you might even have information about the direction of their company's future plans. You can use all these data about your clients and customers when you offer them a new product or service to get them to make a purchase. If you think you still need more information, you can always incentivize your approach and offer them something in return for the information that you need. Retaining clients also require that you continually add value to your business relationship, so new offerings are generally expected by your clients and customers. A company that doesn't have anything new to offer clients is a sure sign that it is not growing. Furthermore, your existing clients already trust your brand, so offering them a new product or service is all a matter of whether this new product or service is relevant to them.

However, there is a significant concern among marketers regarding this type of marketing principle. While the returns on client and customer retention is high, there is always the risk of losing such a valuable client. The more valuable a key client becomes, the higher the risk once that client is lost. There is also the issue of clients becoming unreasonably demanding over time, especially when they realize their own value to your company. This situation is easily avoidable, and if you build just the right relationship with each of your clients, you can safely expect a bright future for your company.

The Evolution of Social Media Marketing

Before the social media boom, marketers thought social media marketing was just another fad that would soon likely pass, something in the vein of pyramid and networking scams. But when Facebook started attracting attention from the year 2004, more and more social media marketing strategies were developed. Today, this marketing tool has allowed start-ups and established companies to gain attention without having to spend millions of dollars on advertisements.

A Brief History

Before there was social media, netizens in the 1970s and 1980s spent most of their time on social networks like dating sites and online forums. Six Degrees, Livejournal, and Friendster were the earliest form of social medias.
The dot-com bubble of 1995 - 2002 was a critical event that allowed the internet to become a viable marketing tool. It began with search marketing, prompting brands to create websites to establish an online presence. As Google, Yahoo and MSN’s search engines evolved, companies turned to SEO strategies to remain at the top of search results.


When web 2.0 sites - blogs in particular - increased in popularity, marketers began to recognize the potential of content marketing. Inbound marketing, where more value is added for the customer and business is earned, starts replacing age-old “buy, beg or bug” outbound marketing strategies.


In 2003 - 2004, the arrival social media sites like Facebook, LinkedIn and My Space initiates the shift of internet users from multiplayer online games into social networking sites. Eventually, businesses picked up on the positive effects of a social media site presence on e-commerce and started creating their own profiles on the popular networking sites.


In the years that followed, customer’s favorable attitude towards social media marketing slowly changed business marketing preference from the more aggressively-proactive outbound marketing to the more reactive inbound marketing.


Nowadays, over 90% of marketing executives utilize social media as part of their marketing strategies, and successful businesses utilize social media marketing for branding, lead generation, customer retention, research and e-commerce. Not only does social media manage to significantly reduce marketing expenses and the time needed to market products and services, it also increased the effectiveness of marketing and overall customer satisfaction. 83% of customers who post complaints on a brand’s social site like Twitter and get a reply state that they are satisfied. This helped companies retain more of their customers, resulting to increased existing customer transactions.


Capitalizing on free Internet


There are over 2 billion people online at any given time. Around 23% of the total time spent on the internet is spent on browsing or interacting within social media sites. At least 53% of individuals who are active on social media sites such as Facebook are following a brand. With the help of global internet, more and more customers (if not all) are expecting their brands to have an online presence.
This year’s tablets, iPads, and Android-operated phones will only make internet browsing all the more accessible for consumers, and social media marketing will allow companies to reach out to more target markets. As long as the internet exists, social media will remain an important part of marketing strategies.

Inbound vs. Outbound Marketing

There is some debate on which marketing strategy is most effective, or rather, whether or not outbound marketing is still relevant. New age marketers are quick to point out that inbound marketing is far cheaper compared to outbound marketing, and the leads generated from inbound marketing tactics are more likely to convert to sales. Before joining the argument, let us first take a closer look at the two marketing strategies.

Inbound Marketing


The premise of inbound marketing is to attract prospects to come to you of their own free will by rousing their interest in your product, service or brand through helpful information. It is a two-way communication that makes use of various media available on the internet with the goal of educating or entertaining your target market and providing them with the information that they want.


As a marketing tactic, inbound strategies rely much on the internet, which isn’t at all an inconvenience in this day and age where everyone’s instinct whenever they want to know something about anything is to “google” it. The same holds true for consumers. When a consumer wants to purchase something, the initial instinct is to look for reviews and comments about it on the web.


Inbound marketing makes use of websites, SEO, inbound telemarketing and an active social media presence. An informative and engaging content marketing strategy which includes blogs, podcasts, white papers, vlogs, ebooks, and attractive infographics is created to entice your target market to come to you.


For this marketing tactic, you have to make sure that your online presence interprets your brand as reliable and informative. And if you really want to keep attracting more leads, you have to keep it entertaining as well. As long as they know that you can provide them with what they need, your target market will keep coming back to you, and if they wish to purchase, your brand will be on the top of their list because they know they can trust you.


Outbound Marketing


This marketing strategy can be considered as mainly “traditional.” Outbound marketing normally makes use of paid advertisements, TV commercials, huge billboards, outbound telemarketing through cold calling, email marketing, direct mail and trade shows.


Although considerably more expensive compared to inbound marketing, outbound strategies are more effective in generating lead volume, providing a greater quantity of leads for filling the top of the pipeline. Also, by utilizing behavioral analytics on target markets, this marketing tactic can actively seek out and appeal to specific audiences. It is also able to reach a wider audience within a short span of time, as in the case of billboards and TV commercials.


Outbound tactics are mostly used in B2B marketing. Unlike B2C companies, B2B companies don’t have the luxury of leads who actively seek out their products and services as most of their leads already have them. It is the goal of outbound marketing to show these leads that there are better products and services than the ones they are currently using.


Inbound marketing is able to provide quality leads for a cheaper price, but quality without quantity can never sustain a business, and it is outbound marketing who is able to provide the required numbers. In the end, the best marketing strategy is to combine the best of both in developing your own marketing plan to generate as much qualified leads for your business.