Tackle your marketing in THIS order!
Updated: Oct 19
“Brand new customers only”. Remember that advert?
A common question we get asked when planning customers’ marketing campaigns for them is “Should we be looking for brand new customers only or trying to sell more to our existing ones? What is our priority?”.
The answer to this varies from business to business and depending on the product or service that you offer, but there are two things that we like to have a look at before we answer the question.
How well developed is your customer base? Are you currently making the most of selling your customers more product, or additional products?
How long can you realistically wait for a repeat order? If you sell high end products or services (like a car, for example) then customers won’t be buying these every year, therefore we can look to hunt for new customers.
But…did you know that research has shown that the cost of obtaining an “acquisition” sale (gaining a brand new customer) is between three and thirty times as much as achieving a repeat sale from an existing customer?
This means you need to maximise the amount of business from your existing and former customers.
So, when planning your marketing, make sure you prioritise your marketing budget in the following order:
1. Existing customers – given the statistic written in red above this is your top priority. Campaigns that focus on retaining your existing customers so they don’t get poached by a competitor and campaigns that encourage more repeat sales and cross-selling of your other services or products is priority number ONE!
2. Prospects – these are people who are sitting on your database who may be enquirers, previous customers who haven’t bought in a long time, those that may have responded to an advert, people that you may have previously done quotes for but didn’t convert to a sale. These people have already expressed an interest in your business and will give a better return on investment than any cold data lists or advertising campaign.
3. New business – we are not saying forget new business altogether. Definitely not. Just make sure that you maximise “warmer” opportunities first. When looking for new business, ensure that you have specifically profiled the customers you are looking for so that your new business campaign is as accurately targeted as possible. This will help ensure that your return on investment is maximised.
A final note on customer retention marketing.
There have been a number of studies about customer retention marketing and customer loyalty and all have come up with the same conclusions – many customers change suppliers simply because their existing supplier did not care or communicate enough with them! There is no point spending thousands on a marketing campaign to existing customers if they have no affection for your brand due to poor customer service.
So, before you embark upon your marketing campaigns take a good long look at your customer service. Where can it be improved?
Fantastic customer service (where your customers are DELIGHTED, not just SATISFIED) will be the very foundation to ensuring your marketing retention campaigns work effectively.