The cheapest way to grow your business

If you can keep customers coming back, again and again, there’s no cheaper way to grow revenue, profit, and cash flow.

Although you wouldn’t know it in most businesses, customers really are the most important asset in every business (second only to their staff).

Yet, all-too-often, customers can’t get their calls answered, or when they do they end up speaking with someone who is rude and unhelpful. Their emails are ignored. Their social media messages are responded to in the sort of formulaic way you can tell a lawyer wrote, rather than with any sense of empathy or concern about the customer as an individual.

Finding new customers is often prioritised while looking after existing customers is side-lined, at best, resulting in a fair number of your current customers taking their business elsewhere each year.

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Why this matters

And this is despite the fact that it’s a lot more profitable to keep an existing customer than find a new one.

According to Forbes, finding a new customer can cost 5-7 times more than keeping an existing one.

And according to Hubspot, a brand has a 60-70% chance of making a sale to an existing customer compared to just a 20% chance of selling to a “cold” customer.

So keeping existing customers is not only 5-7 times cheaper, you’re also 3 or 4 times more likely to make a sale with an existing customer vs a completely new one.

So, how can you keep more of your existing customers for longer?

Top copywriter Glenn Fisher tells the story of his visit to a Drake concert in his excellent book “The Art of the Click” (well worth a read, by the way, even if you're not a copywriter).

If you're not familiar with his name, Drake is one of the most popular music acts on the planet at the moment – he has won 5 Grammys and has sold around 200m records.

Glenn noticed three things Drake did in his concert to engage his audience and, indirectly, make it more likely they would buy more of his records and his merchandise.

And your business can take these principles and do some or all of them too.

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3 winning strategies

Firstly, for most of the show, the giant screens on stage behind Drake were covered with images of the fans in the audience. Imagine seeing yourself “standing with” one of your musical heroes – would that make it more likely you would buy more of their records, or the concert DVD, or even just tell all your friends about how cool this was? I suspect it is.

Second, he brought an audience member up on stage to sing to at one point, but selected a (to quote Glenn) “rather sturdy woman”, a normal human being not someone unrealistically aspirational – a real person, not a catwalk model

Finally, he spent the last ? hour of the show walking along a hydraulic stage above the audience, pointing out individual audience members and doing an on-the-spot rap about them – how nice their hair was, what a great T-shirt they were wearing, and so on.

He gave them individual attention and their own moment in the spotlight.

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How does this relate to your business?

Well, when you talk about your business are your customers the heroes or is it all about you? Are they on giant screens behind you on stage or is it just a static shot of your logo or drone footage of your head office building?

Do you give customers individual attention, even if they’re not famous brands or people who spend millions with you, and engage with them 1:1? Or do you tell them to ask the chatbot on your website, visit the FAQ page and try to work everything out by themselves from there?

Do you show your customers how much you appreciate them? Do you recommend them to your friends? Do you tell everyone how great they are? Do you share their exciting news, even if it has nothing to do with you or your business?

That’s the business version of what Drake does, and he’s sold 200m records, so maybe...just maybe...there’s something in his approach.

Looking after your customers makes it 3x more likely that you’ll make another sale to them vs a cold lead.

If you believe Forbes that it costs 5-7 times more to find a new customer than to keep an existing one, that means for every $100 you spend finding new customers, you’d spend only $15-20 to keep the ones you already have.

In my experience, that’s an overestimate…you don’t need to spend anything like that much…but the principle is sound. However, even if you do spend $15-$20 vs $100, that should be a no-brainer.

Many businesses carry more cost than they need to because they’re so focused on (expensive) customer acquisition they forget about (much cheaper) customer retention.

If I could give you a piece of equipment for $20 instead of the $100, you’d probably bite my hand off.

But if I can bring you a customer for $20 instead of $100, and you can’t be bothered to answer the phone, then you’ve locked in a high-cost business model that means you need to work harder and harder to cover costs 5-7 times higher than you needed to spend servicing a customer you already have.

You don’t need to be much of an accountant to realise that’s unlikely to be a good economic decision.

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What you can do today

Why not check out the service your company offers for yourself?

·??????? Call your main customer service number – how long does it take for the call to be answered? Do you have to navigate robot-voiced messages and confusing menu systems? How easy is it to speak to a human?

·??????? Send an email to your customer service team. How long to you wait for a response and does it sound like a lawyer wrote it or a human?

·??????? Call 10 customers at random and ask them what one thing you could do to help make their experience with your company better.

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None of that will cost you a penny.

The insights you get into what it’s like to be a customer are invaluable.

Most of what you find, you’ll be able to fix for free.

Great customer service, done right, is one of the highest RoI activities you can do within your business.

It always surprises me that more businesses don’t see it that way. The costs are generally zero-to-small. The potential benefits are huge.

So today, think about how you can make your customers your hero – project them on stage behind you, give them individual attention, share their good news even though it’s got nothing to do with you.

We can all do more of that and build a better business in the process.

And, best of all, none of that costs you a penny more than you would have been spending anyway. But delivers a much bigger result.