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Are New Customers Killing Your Company?

Authors: Jay Baer Jay Baer
Posted Under: Social Media
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social-media-strategy-free-hugs(Originally written for MarketingProfs MPdailyfix blog)

I’m sure you’ve heard the maxim that it costs a lot more to get a new customer than it does to retain an existing customer. It makes perfect sense, right? So why is it that we spend so much time and money in violation of that credo?

At the recent Email Evolutions Conference, direct marketing legend Stan Rapp pointed out that the advertising on this year’s Super Bowl equalled approximately one third of the total amount spent on email marketing in the U.S. last year.

Think about it. Thirty minutes or so of commercials featuring babies, monkeys, snow globes, horses and other trickery hoping to garner new customers in an economy where consumers are at best disinterested in establishing new brand relationships. Contrast that with email (and social media) where you can communicate directly to people that have already expressed an interest.

Turn Your Budget Inside Out

In an economy like this, why are we still having conversations about the effectiveness of radio versus print? Why aren’t companies turning their marketing budgets inside out, and focusing the vast majority of their resources on taking care of their current customers?

Think about it. How relevant and timely could your email program be if you invested in it what it costs to make even a modest broadcast commercial? How many Comcast Cares – style social media brand ambassadors could you hire instead of the money you spend on Yellow Pages or print ads?

Are you doing everything you can to hold on to the customers you have? I’ll argue that if you’re spending even one dollar on outbound, acquisition efforts you are not.

Think Bottom Line, Not Top Line

This approach requires a complete overhaul of the notion of ROI, moving from a customers and dollars gained mindset to a customers retained and dollars protected perspective. And how many industries can truly expect top line growth in the next couple years? If you’re not one of them, why are you continuing to focus on filling the top of the funnel instead of sewing the bottom of the funnel shut with killer customer service, social media outreach, and improved operations?

Think about it.

(photo by Kalandrakas)

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