March 14, 2010

Invest in New Customers or Existing Ones?

On a recent radio interview I was asked: “Do you think businesses spend too much money on trying to get new customers and not enough on keeping the customers they currently have?”

My answer: ABSOLUTELY! Most marketing efforts that I observe are dedicated to growth prospects which typically translate into acquiring new customers. Nothing wrong with this, but it leaves a huge vulnerability in your current customer base which may very well be viewed by your competitors as THEIR growth opportunity. Organizations ignore their current customers at their own peril.

Its perverse logic really. It requires substantial more investment to get a new customer than keep an existing one and the economic returns are higher as well. But I guess its not as sexy.

Growth, however can come from customer loyalty investments. Here are six BE DiFFERENT ideas:
1. Market more solutions to your existing customers. Show them additional value they can get from you and make it easy for them to get it.
2. Sell your line of Value based solutions to customers where your Customer Share position relative to you competition is low. Grow your share position at the expense of ‘the bad guys’.
3. Perhaps some of your Offers are priced below the value they provide and where you have indications that price-demand is relatively inelastic . In these cases consider increasing prices.
4. Create new Offers for you current customers. Discover new problems they have that can be solved bu you in a way no other competitor can.
5. For every new customer gained, repeat the above steps.
6. For your most influential customers, step up the service levels you provide them. Get them talking about you to others. Force viral marketing to happen so additional demand starts knocking at your door.

At the end of the day, the BE DiFFERENT approach I suggest is to leverage your existing customer base to grow your business. Not only does it work by using the trust relationships you have already invested heavily to maintain, it will point to new customer possibilities that have already been qualified.

Give it a try. You have nothing to lose, and growth to gain.

Cheers, Roy
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Strategy Creation | Permalink
Posted 3.14.10 at 08:35 am by Roy Osing | Read Comments (0) | Leave a Comment