Are You Running Your Marketing Backwards?

With the right perspective, if you think about and observe many entrepreneurs and small business owners, you’d have to come to the conclusion that they’re running their marketing strategies backwards. Let me explain. For most businesses, their single focus is getting ‘new’ customers. I believe that for the majority of these businesses too many resources and too much emphasis are placed on new customer acquisition and not enough on customer retention. Not enough by a long shot.

Remember the 80/20 rule? It states that 80 percent of your profits come from 20 percent of your customers. This is true; yet again too many companies spent a huge percent of their marketing budget on new customer acquisition, instead of where it has the greatest chance of yielding the largest return on investment: current customers. Does doing that make sense? Of course not! Instead, I urge you to dedicate the proper percentage of your marketing budget and efforts to the place where it has already proven to produce results—your current customers.

No matter what business you’re in, your greatest source of new revenue is with your existing customers. Plus, the longer they are customers, the more likely they are to spend more with you and refer new customers. Take advantage of that! Plug the holes in your bucket! (Sorry, guys, but duct tape won’t get this job done. You’ll need glue.)

You're Sitting on a Gold Mine

You may not realize it, but you’re sitting on a gold mine. Simply look at your current customer list. “There’s gold in them thar names!”

There are really only two ways to grow your business: Get more clients, or Sell more to those you already have. Profitable, growing businesses are the ones that are plugging the holes in their leaky buckets and keeping their existing clients longer. Getting your current customers to stick to you like glue is the key to your organization’s growth and long-term profitability.

In fact, for every 1 percent increase you achieve in customer retention, there’s a 7 percent increase in profitability. That’s huge!

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Chuck has sold over $559 million in goods and services for himself and his clients. Contact him at [email protected] or 480-905-5570 or visit our site www.ArizonaMarketingAssociation.org