Why is make more sense to serve existing customer better than acquiring new customers for new age start-ups?

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

A loyal customer is worth 10X the value it pays in the first year of being a customer. Having said that it doesn’t mean that we should stop acquiring new customers.

When we start a new business the first thing we do is to validate the product and acquire the first few customers who also becomes your evangelist over a period of time. Now as we start to grow the business need more customers to survive. Here comes a dilemma and a typical problem each and every business face as they start to grow and scale. In order to grow and show numbers the most common mistake business do is to take existing customer for granted and keep on acquiring new customer not maintaining the after sales service to the required level.

Instead if we focus on providing an awesome customer experience each customer becomes an evangelist as per the inbound marketing concept and hence they speak to people and market your product which in turn bring 10X customer and the CAC reduces drastically by 5X and the GM increases by at least 10% with the improvement in processes and the efficiency of customer support.

Everyone know this fact but still people don’t follow it. Is it the market share battle? Is it the survival battle? Are we so focussed on short term that we do not think about long term sustainability? Let’s think, introspect and act to save what is left.