You’ve probably heard that it’s 7 times cheaper to keep a customer than to acquire one. Makes sense, right? You know customer acquisition costs are high (or crazy high depending on your industry or customer buying cycle). Plus, there is a possibility that even when you find a new customer, they may not buy again. So then you have to spend again to acquire another new customer.
It’s not surprising companies devote much of their marketing budgets toward acquisition—it fits into the common obsession with short-term / immediate gains. The problem is, if you don’t have a longer-term view in mind, the newly acquired customers don’t get much attention or thought. And when they are out of mind, they don’t get the best service, the most help, or the greatest value. So it’s a vicious cycle of customers coming in the front door with the fancy lobby only to quietly exit through the back door to the alley.
I’d like to invite you to stand out from the crowd and focus on the full customer lifecycle. Focus on how to gain and keep customers. Most companies would love repeat sales from existing customers and would love positive word of mouth or referrals. It’s a much more economical way to grow. Wouldn’t you love to have customers market for you? How does that happen? It happens when you focus in two main areas:
Engage in a relationship with customers —add value over time, not just before/ at the point of sale. Communicate with them over time, offer helpful ideas, tips, and anticipate needs where possible. In short, become a resource to your customers. This is a big missed opportunity for many companies.
Deliver a consistently positive customer experience. Get started by fixing any commonly recurring pain points in the experience. Your customers need to be able to rely on you and know what they can expect from you.
We can all name companies that focus on short-term customer acquisition—and those often have bad raps for customer experience. Cable and cellphone companies often come to mind.
Who can you think of that uses this two-part approach? Can you think of a company that you are a customer of that focuses on the long term and delivers a consistent customer experience?
It’s time for marketing to step up and press for this two-part approach. Yes, it will be harder to show quick-hit results, but you can build the case for longer-term growth. This kind of growth is MUCH cheaper than a budget focused almost entirely on acquisition. You’ll instead need budget that, for example, includes retention strategies such as: content development, email marketing, social media management, and improving online and offline customer experiences. I recommend you develop metrics for engagement as well as acquisition. Engagement and retention metrics could include: click thrus on emails, positive online reviews, repeat purchases, referrals, and customer lifetime value.
It’s time to start thinking this way. And you’ll save money and grow your business. You’ll find that those who use a customer lifetime approach will see much better returns than those who don’t.
What do you think?