February 4, 2018

Retention VS Acquisition

I once had a discussion with a business owner who told me that his main marketing objective was acquisition of new customers. He said that he had read every book, watched every DVD, listened to every CD, and participated in every webinar or seminar that he could find regarding selling his services to someone new.

This person prospected for new customers every way he could; he made hundreds of cold calls each day, sent out hundreds of emails, even sent mass mailings on a regular basis. He was a selling machine everywhere he went, and demanded that his employees do the same as he did. He tried to sell to new customers 24 hours per day.

I asked him how successful his business was, and he told me that he was struggling and was considering firing all the employees he still had (several had quit) and closing the business. When asked how he liked selling, he admitted that he hated everything about it. As to his personal life, he said that his wife was leaving him.

When I asked him how much he spent in time, effort, and money to acquire new customers, he said that he had no real idea, but that it was a lot. I also asked him how his new customers learned of his business, and he said that he didn’t track that information. Just like every expense, all businesses should know their marketing costs, including time, effort, and money. (Do not forget the time required.)

It costs roughly 10 times as much to acquire a new customer as it does to retain an existing client. This business owner admitted to me that he never contacted a customer after their initial order. He didn’t bother to thank them for their purchase, never thanked his customers for remaining customers over time (most didn’t), or never thanked any that referred any new customers to him because none did.

Everyone loves to be noticed, and everyone loves to be thanked. Happy, well noticed clients will refer new business and will remain loyal clients over time. While acquiring new customers is important, retaining existing ones is the life blood of all businesses. We business people must learn that retention of existing customers is better for our success in business than the acquisition of new customers.

Gratitude Marketing is a philosophy that will bring success to a business and allow those who practice that philosophy to lead more pleasant, enjoyable business and personal lives. Are you proud of your business and what you do in it? Maybe the time has come for you to try something new in how it operates. Reach out and thank a client today and see how it works. You might also try something similar with your employees.

While customer acquisition is a vital part of business growth, client retention is essential for it to persist and survive. In addition to the tangible results that allow a business to continue to succeed, it provides a means for us to grow and prosper personally. Please leave me your comments here, or call, or text, me at 360-314-8691, or email me at Jim@JimTeasley.com. Maybe we should have a chat about this soon.

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