Email Marketing for New Customers vs Email Marketing for Existing Customers

Which works better? Email Marketing for New Customers or Email Marketing for Existing Customers

If you operate a small e-commerce business, you might be scratching your head. Is it better to use email marketing for existing customers or to target and convert new subscribers? 

It’s a dilemma that practically all brands face at some point. Should you invest your marketing budget into selling to people who’ve bought in the past and focus on customer retention? Or should you continually look to expand their existing customer base? 

The answer is probably a combination of both. However, there are distinct advantages to focusing on email marketing for existing customers compared to trying to find new ones (as you’ll discover below), including higher business sales and profits. 

Customer Retention vs Customer Acquisition

The way you appeal to new and existing customers via email marketing is different. 

Emails that focus on acquisition tend to offer giveaways, contests, discounts, video courses, free ebooks, and buyers’ guides. It’s all about delivering as much value as possible upfront to encourage customers to explore your brand further. 

Retention is different. Strategies here include things like welcoming new customers on board, alerting them when they add new products to your site and asking for reviews and feedback from customers. You can also do things like cross-selling, up-selling, and reminding customers to regularly place new orders for perishable goods. 

Obtaining new customers is a necessity for all businesses. If you don’t have a pool of paying clients to begin with, you won’t make any sales. However, there are some distinct advantages of selling to existing customers versus new ones.

For example, acquiring new customers is expensive. Various reports suggest that it may cost up to 500 percent more than simply selling to an existing customer. 

The reason for this is simple: when people don’t know your brand, convincing them to spend money with you is more difficult. You’re having to start from scratch to build trust. 

When you use email marketing services to sell to existing customers, though, it’s different. They already trust you and so are much more likely to buy from you if they can see the benefits of doing so. 

Increasing customer retention is also great for profits. Data show that just a small bump in your retention numbers can boost profits by a very large amount.  Famously, research done by Frederick Reichheld of Bain & Company (the inventor of the net promoter score) that shows increasing customer retention rates by 5% increases profits by 25% to 95%.

Emails that you sent to existing customers are also much more likely to hit home. Open rates are typically higher and customers are much more likely to buy from you. 

Statistics like these highlight the critical importance of customer segmentation. There’s a massive difference in value between new leads and existing customers. While obtaining new customers is important, data suggest that you are better off focusing the majority of your efforts on audiences that are already buying from you. 

Unfortunately, many businesses haven’t gotten the message yet. They focus too heavily on acquiring new customers and not enough on selling to their existing clientele.

A basic mistake that fortunately is easy to fix.

Marketing To Existing Customers

We are not arguing here that you should avoid all new customer email marketing. Inevitably, customers will flake away from your business over time, making acquiring new customers essential. But your processes should be such that the majority of your focus is on existing customers. This way, you can put your marketing resources to the best use possible and earn the highest returns. You don’t want to be forever chasing down customers, trying to pick up the odd sale here and there. Instead, you want reliable customers who come back again and again. 

If you run a small e-commerce business, your priority should be to use email marketing to stay in touch with your customers. How you approach this depends on the number of existing customers that you have. Boutique outfits will be able to reach out one-on-one as part of their email marketing strategy. However, larger companies will need to use a more generic strategy. 

Staying in touch with customers via email marketing offers many benefits.

Remind Customers About Upcoming Events

For instance, you can use your email marketing to remind customers about upcoming events or offers. Many e-commerce businesses, for instance, regularly send their audiences coupon codes that they can use to get discounts or free products when they make an order over a certain value. 

Provide Seasonal Tips

You can also provide customers with relevant seasonal tips on how to get the most out of their purchases. Providing information ensures that you’re giving them as much value as you can. 

Maintain Your Professional Appearance

Sending up follow-up emails to existing customers helps you maintain a professional appearance. You can tailor your marketing messages to promote your ideal brand image, subtly changing how customers perceive you. 

Communicate With Older Clients

Email marketing is a great way to stay in touch with older clients too – perhaps customers who haven’t purchased from you in years. These people are often a valuable resource because they already know and understand your company. Reaching out to them periodically can encourage them to make new purchases. 

Get Referrals

Lastly, email marketing to existing customers helps with referrals. Old customers might not need to buy from you directly. But reminding them that you exist increases the likelihood that they will recommend you to somebody they know. 

Wrapping Up

At Websand, we believe that both forms of email marketing are essential. Ecommerce businesses and other companies that sell online require customer segmentation that appeals to both. 

But there’s no denying that the returns to marketing to existing customers are higher. This tactic drives sales to a far greater extent than focusing on acquisition alone. 

Unfortunately, the majority of small e-commerce business managers have the wrong email marketing strategy. They are focusing too much on finding new customers and not enough on developing those that they already have. 

It is essential, therefore, for brands to think carefully about how they approach email marketing. You want to weigh your efforts in favour of appealing to your existing audience. Email marketing services can help you get the balance right.