Do you love your customers less than your prospects?
‘Unmissable deals here’, ‘introductory offers there’, if you offer that sort of thing you may be one that loves and spoils new customers more than existing ones…
This seems to be quite a common one, so we caught up with Cheryl Crichton, one of the Watertight Marketing Accredited Consultants to gather her tips to make sure you spread that love evenly.
This is what Cheryl shared…
From a marketing spend point of view, spoiling new customers more than existing ones looks expensive to me, especially for small businesses that don’t have the massive marketing budgets that the big boys do. It costs money to acquire new customers, not to mention how irritating it can appear to existing customers – ‘why don’t I get that deal?’.
I think small businesses are far better off loving (and spending marketing budget on) the customers they already have and working their way back to a customer who’s never heard of them. Even if you’re a new or start-up business without any customers yet, getting ready for them and supplying everything they need to influence the decision to buy off you and stay a loyal customer is the way to go.
Let me explain…
Start with loyalty and work your way up
Most businesses will be familiar with the concept of a sales funnel – leads in at the top (prospects) and sales down at the bottom (customers). Or another way of looking at it is generating awareness at the top (acquisition) and maintaining loyalty at the bottom (retention). The ‘customer journey’.
In my experience people think that marketing happens at the top of the funnel – they turn on some ‘marketing taps’.
The example I opened with was just that – a business who is spending, spending, spending at the top of the funnel to get new customers (advertising, PR and some Social Media maybe).
That’s great for getting people to the top of the funnel, but in my kitchen things fall out of the bottom of a funnel* (and that could be customers). That’s an expensive leak in the customer journey don’t you think? Especially if you’ve spent all that time, money and effort, not to mention love, at the top.
That’s why I like to think of the bottom of the funnel as a bucket, not a colander, with taps running customers through funnels to get to it. The trick is to ensure your bucket has no leaks before you turn on any taps. As I said, start at the bottom and work our way up, ensuring things are watertight with your marketing.
Think twice about spending at the top
It’s definitely cheaper to look after and nurture a loyal customer than to court a new one. Even if you sell something that’s a ‘one off purchase’, a customer for life is a truly valuable one – you want a loyal champion who will spread the word and refer you to others. So keep talking to the ones you have, they might buy off you again.
Plus, making small incremental tweaks to your marketing, starting with the bucket, has a bigger impact on returns (with less spend) than doing it the other way around. There’s a great tool from the award-winning small business book Watertight Marketing that illustrates this perfectly. If you have a copy, go register it and download the ‘Uplift Calculator’ from the Member’s Area. Chapter 9 also looks at what shape your budget ‘should’ be, and gives guidance on where you should be spending money on marketing and where you shouldn’t.
Marketing is all about ensuring there is information and engagement at every step of the customer journey that supports and/or influences the decision people make to buy from you.
I also believe there is potential for customers to leak out along the way of the customer journey, so you need to ensure you are plugging those leaks so as not to leak those customers.
In summary from today’s article:
- Love your loyal customers as much as your prospects (or more). It’s cheaper.
- Fix any profit leaks from the bottom up (of the customer journey).
- Don’t spend marketing budget where you don’t need to. Work it out subject to what you sell and how people buy from you.
About Cheryl Crichton: With extensive experience in branding, design and advertising, Cheryl helps growing businesses stop wasting money on marketing. She’s always looking forward to her next challenge and sees her role as simply looking after clients and giving them good marketing advice. She is a Chartered Marketer and accredited to work with the framework, tools and techniques of the award-winning small business marketing book Watertight Marketing by Bristol author Bryony Thomas.
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* Popular saying by Watertight Marketing author Bryony Thomas.
© Watertight Marketing Ltd. The key concepts, frameworks, illustrations, and structure used in this article remain the intellectual property of Watertight Marketing and are used with permission and under license by Watertight Marketing Accredited Consultant Cheryl Crichton.