Marketing: New customers are costly, existing customers generate money


Existing customers form the business basis of successful companies – this applies more than ever in digital times. In the long run, they leave more money in the shops than first-time customers.

Time and again, online print shops are reporting that the costs of acquiring new customers on the Internet are growing at an unrelenting rate. Yes, of course, it’s not cheap when it comes to Google. But I also wonder why online printers don’t use their own medium, paper, and use direct mailing in order to find customers. Not a good idea?

Let’s start by remembering that 80% of marketing budgets go to online shops for the acquisition of new customers. That’s expensive: online merchants spend between 50 and 100 euros to acquire a customer, according to e-commerce expert, Prof. Dr. Gerrit Heinemann, from the eWeb Research Center at the Niederrhein University of Applied Sciences. As a result, these investments can only pay for themselves if the relationship lasts a long time. A new customer would have to have a lot of business cards or flyers printed

“New customers cost money, existing customers cost money. Experts estimate that it is at least five times more expensive to acquire a new customer than it is to retain an existing one.” – Bernd Zipper.

Rigid adherence to new customer acquisition does not always have to be the correct approach. In their study “ROI of marketing measures for existing online customers“, Adobe stated that 20% of existing customers account for around 40% of a company’s sales. Firstly, they order three times more per shop visit than first-time buyers and they are also easier to encourage to make subsequent purchases. Similar and complementary results are also found in other studies, according to which the success rate for sales to an existing customer is between 60% and 70%, while the success rate for sales to a new customer is only between 5% and 20%. Regular customers provide for up to two thirds of the profit.

If the retailer succeeds in persuading a first-time buyer to return to his online shop after the first order, this follow-up visit would achieve an average turnover 3 times higher. For regular buyers, the RPV is even higher. Source: Adobe

These are solid reasons and evidence that existing customers are extremely valuable and – to put it bluntly – new customers cost money while existing customers generate money.

Five Reasons for Existing Customer Marketing

  1. Less effort and reduced costs

Experts estimate that winning a new customer is at least five times more expensive than retaining an existing customer. First of all, a new customer wants to be courted. It is necessary to invest in his or her attention, to arouse interest in a product in order to finally be able to sell it to him or her. On the other hand, existing customers can rely on a functioning relationship and a customer history. On this basis, the existing relationship can be improved and loyalty further increased.

  1. Larger shopping baskets

Existing customers buy more often and usually have larger and more valuable shopping baskets. In addition, loyal customers are less price-sensitive and have better payment habits. This also ensures greater planning security.

  1. More targeted communication

Dialogue with existing customers can be conducted in a much more targeted, relevant and personal manner than when addressing potential new customers. On the basis of existing customer data and user profiles, a valuable dialogue can be established.

  1. Willingness to make recommendations

Recommendations from satisfied customers are more important than ever in online business. In social media and in the real social environment, satisfied existing customers are happy to recommend brands and products. They thus form a bridge to new customers – especially through word of mouth.

  1. Uncomplicated approach

The data protection regulations have not simplified the dialogue between companies and their customers. Communication with existing customers is still harmless and less complicated than addressing new customers. In contrast to e-mail addresses, postal customer addresses can also be used without an opt-in after the implementation of the Basic Data Protection Ordinance (DSGVO).

High Conversion Rate

Many companies have already recognized the great importance of communication with existing customers. According to Deutsche Post’s Dialog Marketing Monitor, every third company targets its advertising specifically at existing customers. Retail companies and service providers each account for around 40% and advertisers with a turnover of more than 25 million euros direct over 60% of their advertising specifically to existing customers.

After all, it is widely known that the conversion rate for postal mailings averages 3.9%, while the conversion rate for e-mails is 0.2% – when the rate is high. In addition, customers who have made purchases in the last three months are particularly easy to reactivate. Here the conversion rate is 5.8%. This is an important reason why Pure Online Players focus as well on letters, cards, brochures and mail. Vouchers or discount codes are also more valuable on paper.

MyPostcard implemented a trigger mailing for the Bremen-based company on the basis of a postal card that customers receive a few days after their purchase in the online shop. The conversion rate is expected to be up to 90%.

There are many ways in which customers can remind themselves. Newsletters can be digital or in print, brochures or special catalogues on seasonal topics which, unlike quickly deleted e-mails, customers can browse through in relaxed moments. Personalized advertising media such as postcards with individualized product recommendations are another approach.

Service providers such as My Postcard enable a high degree of individualization of advertising mailings and address via marketing automation and trigger mailing.

Services make the difference

Addressing existing customers, by whatever means, is an important marketing instrument. But customer loyalty starts with service. In addition to various payment methods, quality labels, advice and transparency of the online shop, customers should also be able to obtain information for example via video or have questions answered in chats with experts.

“With many online retailers, the customer no longer makes a rational decision based on the cheapest price, but on his service experience,” says Kai Hudetz, Managing Director of Market Research and Consulting IFH Cologne. Services are also created on the basis of purchase history, exchange history or complaints, and even inquiries can be used to filter out needs and develop services. “Retailers should therefore know the customer journey and know at which touchpoints their customers expect more service,” recommends Hudetz. “Tailoring individual offers for customers, binds customers for the long term”. And that’s always cheaper than convincing a new consumer.

My Take: Of course, it is important for an online print shop to be present on the Internet, social media and mobile phones. But we should have learned long ago that online channels combined with print media have a stronger effect than a single medium. That’s why I think communication with existing customers is a good idea. But existing customers should not be interpreted as a cash cow. Newspaper publishers, for example, have been making this mistake for some time. They lure new customers with lavish gifts, whilst expecting their regular customers to pay for reduced volumes and rising subscription prices instead of rewarding them for their loyalty.
Marketing: New customers are costly, existing customers generate money
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Marketing: New customers are costly, existing customers generate money
Existing customers form the business basis of successful companies - this applies more than ever in digital times. In the long run, they leave more money in the shops than first-time customers.
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Founder and CEO of zipcon consulting GmbH, one of the leading consulting companies for the print and media industry in Central Europe. The technology and strategy consultant and his team actively support practical implementation in a wide variety of customer projects. His work involves developing visions, concepts and strategies for the players active in the print production process across a wide range of industries. His areas of expertise include online print, mass customization, strategy and technological assessment for print, and the development of new strategies in the print and media environment. Bernd Zipper is the creator and chairman of Initiative Online Print e.V. and, in addition to his consulting activities, is an author, lecturer and sought-after speaker, orator and moderator. His visionary lectures are regarded worldwide as trend-setting management recommendations for the print and media industry. (Profiles also in Xing, LinkedIn).

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