It is simple: Everyone gets excited when a new customer is secured. There’s a celebration, bells are ringing, lots of recognition and rewards are handed out. Song’s like the Black Eyed Peas“BOOM-BOOM POW” or “I Gotta Feeling” are blasting in the hallways and everyone feels as though the most popular person in school just asked them to prom.
Been there, done that: How much celebration is there when a long standing customer renews for the 6th straight year? Forget that they haven’t bid out the work in 3 years (no competition=greater margin) and they are already in your system (low cost of support, faster payment = greater cash flow).
It still only generates the excitement of going to prom with the back-up date and dancing to an old Richard Marx song. Yes you are at the prom, but that spark just isn’t.
Now the reality: It costs 3-5 times more to acquire vs. retain a customer. Getting your current customers buying more of your stuff means it’s harder for them to leave you (increased switching cost) and current customers are much less likely to bid out your work (increasing profitability). Shouldn’t you evaluate how your how you are spending your marketing dollars?
Opportunity: Evaluating your marketing mix today and making the proper adjustments from acquisition to account growth can make a huge difference in top and bottom line results. Now that’s something the entire leadership team will be thrilled to hear about.
Just maybe then you’ll become the most popular person in school (or at least the leadership team) and the CEO throws you the keys to the company G5 and backstage passes to the Black Eyed Peas.