GO BACK TO YOUR CUSTOMERS!

Entrepreneur:       We are adding 10,000 customers every month and
                   ? growing every month

Advisor:            That’s good to hear! How are you able to manage this?

Entrepreneur:       Well, we added a new team member – Head of Customer
                    Acquisitions whose sole focus has been onboarding.

Advisor:            That’s great! But you must have made a lot of changes
                    internally too, right?

Entrepreneur:       Yes. Absolutely. We greatly revised our marketing 
                    strategy. Our organizational goal is 
                    ABC – Always Be Closing. It’s working!

Advisor:            How about your existing customers? 
                    How many have you lost this year?

Entrepreneur:       Ummmm…… We have great net additions….. 
                    Ummmm…… Well, Let me get back to you on this one.

The Advisor here can be an investor, mentor, prospective investor, partner or even your team. Let’s evaluate the value of this ‘Ummmmm…..’.

As everyone here already knows, repeat customers are the testimonials of your product/service quality and a yardstick to measure your business efficiency. They are slowly starting to realize that they made a terrible mistake prioritizing resources on acquiring new customers. Net additions were the yardstick last 5 years. Now, for the moment of truth.

‘Retaining customer costs 1/7th as much as acquiring a new one’.

Understood. Now, why? Is it just that “Good customer service costs less than bad customer service” - Sally Gronow or Can I really do more with my customers?

Go back

Why is it important to go back to your client?

The customers you have served in the past or are currently serving will always be the ideal partners to refer new business to you from within their organization or others. This depends on their experience with your firm.

Think of your customers as 2 kinds:

A. Happy or delighted customers/ The Apples

When your clients are happy with your product or service offering then you can be sure to increase the billable on other value-adds that you can provide, creating stickiness and a long-term relationship.

“The purpose of a business is to create a customer who creates customers.” – Shiv Singh

Simply, customer engagement to ensure that happy customers continue coming back and build referrals.

B. Unhappy or dissatisfied customers/ The Oranges

When a client is unhappy/dissatisfied with you service then that is also a takeaway. It gives you an opportunity to fix a bad delivery and that's the best place to be in. This helps better your offering and provides the crucial feedback necessary for the product or service evolution.

“The customer’s perception is your reality.” – Kate Zabriskie

Simply, customer engagement to ensure unhappy customers are served well to abate the dissatisfaction.

A culture of maintaining these relationships, the apples and the oranges, with clients, makes a lot of business sense from the entrepreneur's point of view. It helps build the brand image, credibility of the team and the brand.

“It is not the employer who pays the wages. Employers only handle the money. It is the customer who pays the wages.” – Henry Ford

Still, don’t believe me?

Some statistics that may help you rethink:

• It costs 7 times as much to acquire a new customer than to keep an existing one!
• Only 40% of the companies worldwide have an equal focus on customer acquisition and customer retention!
• The probability of selling through and to an existing customer is 60-70%, whereas the probability of selling to a new customer is 5-20%!
• Existing customers are 50% more likely to try new products or services and spend 31% more compared to new customers!
• Increasing customer retention rates by 5% increase profits by 25-95%!

Surely these are very compelling numbers. They push an entrepreneur to focus more on customer retention and building loyalty for your product or service. The sales strategy needs to be tweaked from complete focus on new customer acquisition to apportioning some resources for building the relationship with existing clients and those who have used your offering in the past. The entrepreneur could even make this a KRA of a Sales personnel by incentivizing him throughout the lifetime of the customer.