Taking your Customer lifecycle from seconds to decades
There is an old marketing truth that says that you can earn more money from existing customers then from new customers. But for fast growth you need new customers.
Problem is that the two activities need different capabilities and skills. For example: cold calling versus relationship crisis management or creating excitement versus avoiding surprises. But there are also commonalities. For both you need to deeply understand what motivates your customer and good active listening pays off.
There are many pictures showing the journey from first capturing your prospective customers attention to maintaining a long-term relationship based on deep mutual trust. I like this one.
The only way to move up along this scale is by continuously satisfying and delighting your customer. If a mishap happens be completely transparant and strive for fast recovery.
And if you’ve ever doubted if customer retention should receive equal effort and investment compared to customer acquisition, here are a few statistics:
- It is 6-7 times more expensive to attract a new customer than it is to retain an existing one. – ThinkJar
- The probability of selling to an existing customer is up to 14 times higher than to a new customer. – Marketing Metrics: The definitive Guide to Measuring Marketing Performance
- If satisfied by the customer experience, 73% of consumers will recommend a brand to others, and 46% say they will trust that brand’s products and services above all others. –SDL Global CX
The answer to where and how intense to focus your sales and marketing efforts is not as simple though. In the end it depends on your chosen strategy in the specific markets that you are active in. How mature is the market, how strong is your competition, how unique is your value proposition?
What do my own experiences suggest
- Start with your strategy, be clear and consistent with your choices.
- Understand your market deeply: both the existing and the to be gained customers. Deeply means both very granular at the individual customer level and understanding root causes across the value chain of your customers (future) success.
- Be absolutely brutal on yourself when deciding what your unique value proposition is.
- Keeping and growing with existing customers, building on their loyalty is indeed very rewarding, both in the work and financially.
- Customer churn is an important indicator of your lasting success.
- It takes different salespeople, different marketing approaches and often different supply chain optimizations to attract new customers at scale versus building more value with existing customers.
- Mistakes can happen in long term relations so openness and caring follow up are needed to nurture the relation forward. With a common vision of the future even larger mishaps can be turned into a strengthening of the relationship.
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