Are you sure you have the ideal Customer Acquisition Mix?

I can hear some readers now: "Who is this guy? He doesn't know my business." Hear me out before unsheathing the swords. You are in business and earning customers and that is to be respected and applauded. But what I'm really asking is, are you certain that you couldn't be growing your customer base more efficiently for your time and resources. I believe this is something that many don't actually investigate often enough or revisit each year. #NowThatsCXy

If what it impacts is customers, revenue and costs, it is crucial for businesses to be intentional with this and revisit regularly.

Feel like you need reasons to read on or revisit your current Customer Acquisition Mix? Let me know if the following give you pause - Did you know...

• The average loyal customer is worth up to 10X their first transaction - Experian 2018
• The probability of selling to an existing customer is 60-70% vs. only 5-20% for new prospects - Forbes 2013; Marketing Metrics
• Customers that have an emotional connection to a brand have a 306% higher lifetime value - Motista 2018
• Up to 68% of new customers can come from existing customers - Semrush 2016
• Loyal customers willingly refer 9 people on average, when asked - Deloitte 2015
• It costs 6-7X more to acquire a new customer than it does to retain/nurture an existing one - Kolsky; White House Office of Consumer Affairs

CXy Concept of the Month:

"Customer Acquisition Mix refers to the combination of strategies and channels a business might leverage to attract and convert prospects into buyers. It involves the myriad of ways a business can create awareness, generate leads and drive sales."

#NowThatsCXy

If you made it to this paragraph, I have your attention. So, if our customers can bring THIS MUCH VALUE to our business, shouldn't we be more customer-obsessed? Shouldn't we be constantly confirming that we are getting the best ROI from our activities and engagements with our customers (without being Scrooge about it).

Getting this optimally right affects who our business targets are, the channels we invest in, budget allocation, tech adoption, what data (and how much) we track, what type of customer journey we need to design, our content strategy, sales conversion rates, levels of customer retention and churn, and even how much we differentiate ourselves from competition.

It is necessary for most businesses to invest in a marketing budget designed to attract new customers with campaigns and ads etc. But if by designing our business with a Customer Experience lens, we can create more loyal customers who refer more new customers at low to zero Customer Acquisition Costs, shouldn't that strategy be formalized and systemic? Shouldn't investment in customer acquisition by referrals be a significant part of our Customer Acquisition Mix?

Only an understanding and comparison of what our current loyal customer behaviour is, and what that Referral-Customer Lifetime Value looks like vs. our traditional Customer Acquisition Costs can give us enough justification. If up to 68% of new customers can come from existing customers, we better treat our customers right until we make them loyal, agree? According to research from Retail Touchpoints, "A customer is 50X more likely to buy a product when it is recommended by their close friends and family". #NowThatsCXy

Now a word from our sponsors....

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The 4 Playbooks of Loyalty: It's Simpler than You Think.

Well, that's it for this edition of the #NowThatsCXy newsletter. Kindly share your thoughts after absorbing it. If you like what you learn, Like, Subscribe and Share.

Have a great day and as usual, Go WIN!

Changing the World with CX and Yours Always in CX, R

Roger Nicholas, Director of CX, Island Analytics & Marketing, LLC