When we ask small business owners, “What’s the most expensive thing in your business” most say the equipment or staff. But in reality, it’s your customer list. Because when it comes to getting a good return on investment from your marketing dollars, research has shown that it’s 7-10 times more expensive to attract a new customer than it is to keep an existing customer.
And when you consider that the average business spends between $50 to $100 bringing a new customer in the door (including advertising, promotion, markdowns, discounts and staff expenses), it seems that marketing to your existing customers should be your top priority. That’s why it’s imperative that every business build a database of customers that can be marketed to and resold to over and over again to maximize profits.
Studies have also shown that having an up-to-date and working customer database can easily increase the value of your business by 50% or more. Think about that. If you are selling your business without records of who your customers are, what their buying habits are and without any kind of assurance that they will visit the business after it is sold, how much do you think a potential buyer will be willing to pay?
On the other hand, consider if you have an up-to-date database of your customers who drive 80% of your business, who are part of an ongoing rewards program and who have proven to be loyal customers of your business. How much more do you think a potential buyer would be willing to pay?