In the marketing world, we often talk about leads and customers. But what is the difference between them?
A lead is someone who has shown some interest in your product or service. They might have filled out a form, downloaded a brochure, or asked for more information. A customer is someone who has purchased your product or service at least once.
Many companies focus on acquiring new leads, but the problem is that they are not loyal customers. They will not buy your product again and they will not refer you to their friends.
We should instead focus on retaining our loyal customers and make them happy. If we do that, then these customers will also be our best advocates for our products and services.
In the modern era, it is not enough to just attract new leads. You need to nurture them and convert them into loyal customers.
A study by McKinsey found that acquiring a new customer costs 6-7 times more than retaining an existing one. This means that companies need to invest more in customer retention rather than just focusing on attracting new customers.
Companies with a high customer retention rate are able to grow their revenue much faster than those with low rates. They also have a higher profitability rate and better return on investment.
In the age of digital marketing, businesses are trying to find new ways to get people to become their customers. The problem is that there are two types of leads – new leads and loyal customers. New leads are those who have never been a customer before and loyal customers are those who have purchased from the business before.
Loyal customers tend to be more valuable than new leads because they already know the product or service, trust it, and will likely buy again in the future. However, because they are more valuable, they can also be harder to win over than a new lead.