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The Hidden Costs of New Customers

Writer's picture: Art RobinsonArt Robinson

Customers are the lifeblood of your company. Whether they are new, one-time or recurring, they are important to the success of your business. So you should spend ample time trying to attain all customers. However new customers cost 5 to 25 times more to attain and these are some of the main expenses that you have when trying to get new customers.


Marketing And Advertising

One of the main expenses in acquiring new customers is marketing, which includes promotions on multiple platforms. Most companies need to promote through Google, social media and traditional media. These costs add up and in the beginning just drive up costs while not providing much return on your investment.


Cost of Marketing


Sales Resources

It takes a lot more resources to convert a mere lead into a new customer. First, you need a digital or offline marketing team to identify leads. As a small business, do you have that? You then need a sales team to reach out to the lead, spend time on finding their exact requirements and figure out if your product meets it. That’s all work you need to do. This work must be done but it eats up a lot of valuable resources and time.


How Loyalty Helps

If you spend $20 per month per customer to retain a 10 customers that spend $100 a month each, you are ahead of the game. But if you spend $400 per month per customer to get 1 new customer who only spends $100 with you, you have lost money. 


Now you need to make this investment in money and time to get new customers. But in the meantime, the implementation of a well run and marketed loyalty program allows you to save time and money. 


Happy Business owner
Business owner happy with Loyalty Program


That is why a small investment in a well run loyalty program, will allow you to create loyal customers that drive your profitability and gives you more financial space to attract new customers.


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