Tips that save time.
Have you ever seen a TV ad of a mobile network that you’re already a customer of, in which they’re announcing that everyone who signs up for their services will receive a new iPhone for $10 (or something similar)?
So you call them up, say that you’ve been a customer for 5 years now and that you want a $10 iPhone too. And to let you know how important you are they say something like “no no, this offer is for new customers only.” What you want to say in such a moment is probably something like “screw you then, I’m leaving!” (Remember, don’t curse at anyone … who didn’t have it coming, it’s rude.)
Anyway, that’s essentially the problem. Too many businesses (online and offline) tend to focus only on getting new customers and forget about taking care of the existing ones.
“That’s not me” – you might be thinking – “I’m always providing good value to my folks.” But are you, really? How’s that email list of yours, for example? Do you offer a shiny new gift just for joining it and then keep attacking your subscribers with constant promotion and very little free content? How’s that taking care of anybody?
An extreme scenario, I know. But if you’ve been on the internet for a while I’m sure you’ve come across many email lists (mostly in the internet marketing world) that try to convince you to join them by offering a ridiculous amount of free stuff only to send absolutely no pure-information content after day one… only sales pitches and affiliate emails that haven’t even been edited.
The mobile network case and the internet marketing list case are very similar. They are both examples of “new customers only marketing.” An approach where a business owner focuses only on getting new customers and completely forgets about the folks who have already bought something.
This approach is not the best possible idea. The most obvious result of such a behavior is a much lower stick rate, which means that after a very short period of time people decide that they no longer want to be your customers and leave as soon as they have the chance. In the end, the lifetime value of a customer decreases.
Considering that the most expensive part of marketing is getting a new customer, while keeping an existing one tends to be a couple of times cheaper, focusing your efforts only on new customers is a highly uneconomical practice.
And it doesn’t matter whether we’re talking niche e-commerce stores, email newsletter lists or social media consulting. Same rules apply. Treating your existing customers right can go a long way.
Everybody knows that it’s much easier to sell something to an existing customer than to a freshly obtained lead.
Like for example, if you have an uncle who has been a Ford customer for half of his life, do you think that it will be easy to convince him to buy a Renault instead? Well, it is possible but not likely if the nearest Ford dealership offers him a good deal on buying back his old model and replacing it with a new one for a highly discounted price.
So let’s take it the other way around: how to make your existing customers love you and leave only if they’re dead?
Switching to existing customers focused marketing
There’s only one main rule of this existing customers focused marketing: letting them know you care.
You can do it by offering something valuable only to your existing customers, for example. Or by sharing a piece of advice they wouldn’t have gotten if they hadn’t been on your email list. Or simply by conducting a short survey (more on that below) and providing a product they need/want… I’m sure you have many ideas of your own.
Let’s talk benefits – what existing customers focused marketing can do for you.
1. You can only guess what new customers want, you can always ask what your existing customers want
When you’re trying to get some new customers it’s always a guessing game. You can do market research, ask a few people, brainstorm a little, perform keyword research, but in the end, you have to go with your gut feeling about what a well-received product is probably going to be. And of course… you will get this wrong more often than you think.
When you’re working with your existing customer base, you can do something as simple as a survey to find out what they want, or what problems they need taken care of. If they’re happy with your previous products/services, they will be keen to respond.
2. Zero-cost marketing
Showing an offer to a new customer costs money. It doesn’t matter if you’re investing in PPC, spending time on improving SEO, or buying 30-second spots on TV. Showing an offer to an existing customer costs no money – you can simply send them an email.
3. Increasing the lifetime value of a customer
When you’re focusing on your existing customers, it means that you’re creating new offers, content and opportunities just for them. Hoping that some of these offers will actually convert is not a reckless thing to do… So in the end, each customer will bring you more money.
4. Increasing the stick rate
If a customer sees that you actually care and constantly provide them with tailor-made content, advice and the right offers at the right time, they are more likely to stick around to find out what else you have in store. Even if one of your offers backfires and doesn’t get a desired response, people won’t leave you because they know that despite this one slip-up you’ve been sharing great stuff so far.
5. Better bond with your customers
What do you call someone who always has a good advice, always has something encouraging to say, is always there to help you to solve your problems? … That’s a friend.
6. More predictable income
Existing customers are much easier to predict. If you know what the average lifetime value of a customer is, and what the average stick rate is, you can pretty much calculate what your next month’s income will be.
You can do that also when it comes to new customers, but this group is a lot more prone to any changes in the market sphere. For example, they might just not show up if a new competitor hits the market with a far better offer. Existing customers are not that eager to leave you just because there’s a new guy on the block.
7. Hitting two birds with one stone
If you’re treating your existing customers right, you can use this fact to attract new ones as well. That’s the best part – you can share your offer with anybody. What’s more, the word of mouth works a lot better too. Happy customers are more likely to recommend you to their friends and followers.
To summarize this post (and to keep it 100% honest) I don’t consider the new customers only marketing an entirely bad thing. I’m just saying that forgetting about the folks you’ve already convinced to buy from you is a SERIOUSLY bad thing. And it will start to bring you down soon (there’s only so many new customers out there).
If you were to remember just one thing from this post …
Your existing customers should never get a worse deal than your new customers. (Like the $10 iPhone example.)
What’s your opinion? Do you have any examples of businesses that get this right and treat their customers like they should be treating them?