Are You Running Your Marketing Backwards?

Are You Running Your Marketing Backwards?

With the right perspective, if you look at many entrepreneurs and small business owners, you would think that they were running their marketing strategies backwards.  Let me explain further. For most businesses, their main focus is getting “new” customers. For the majority of them too many resources and emphasis are placed on acquisition of new customers and not enough on retaining current ones.

Do you remember the 80/20 rule? This basically states 80% of your profits come from only 20% of your customer base.  Yet, too many companies spend money on acquiring new customers rather than focusing on where the greatest source of ROI is your current customer base. Is this sensible? Obviously not! I urge you to devote your time and budget to the 20%, which is your current customer base.

No matter what your business does, you need to tap into your current customer base, which is your greatest source of revenue.  Customer loyalty to your business increases revenue and can also increase your customer base.  Current customers will spread the word about you, refer potential customers to you and consequently raise your bottom line.  Jump on that opportunity! Plug your leaks! (Sorry, duct –tape is only a bandaid, you need to glue them)

You’re Sitting on a Gold Mine

You may be unaware that you have buried treasure underneath you. It is called your customer list, “there’s gold in them thar names” (as opposed to thar hills).
There are two ways to grow your business – increase your client base or get your current ones to buy more. Those businesses that are filling the holes and increasing client retention end up the most profitable and expand constantly.  If you can get your current customers to stick to you like glue, you will have found the key to growth and long-term profitability.

As a matter of fact, for every 1% increase in retention, a 7% increase in profitability is achieved.

That is huge and should not be overlooked.

 

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