Peter Drucker once said ‘the purpose of business is to create and keep a customer’
And when you think about it, it really is that simple…
I’ll be honest — I think business owners are biologically wired to create more problems to solve.
We find discomfort in stillness.
We are restless beings that are always looking to find the edge that will take us (and our clients) to new heights.
When we think about growing the business, we get excited, motivated and inspired and want to direct that energy into activities that will get the fire burning.
Often that can show up in terms of wanting to run marketing campaigns, promotions, or launch new products, offers, and collaborations.
Nothing is wrong with any of that — in fact, it’s incredibly exciting.
However, when we look at the big picture — at any time, we have a finite amount of time, energy, and resources to commit to any one time.
We have to be honest with the cost of the opportunity.
While I believe that action is crucial to success, I also believe we need to question WHY we are doing the activity, and if there is a more impactful, and more efficient way to achieve the result.
As another gem from Peter Drucker explains — “the most serious mistakes are not being made as a result of wrong answers.
The true dangerous thing is asking the wrong question.”
When the question is poised — how do we grow our business?
Often, this is followed up with — how do we get more NEW customers?
Don’t get me wrong — acquiring new customers is a big part of it, however, it’s only one part of the equation [more on this below]
Time and time again, I have seen businesses shift all of their energy to new client acquisition, while severely limiting the time they spend to ensure their existing clients are happy, and continuously evolving and reaching new milestones in the relationship.
Basically any new sale they convert, they lose a long term client they had assumed ‘would never leave them’.
Now, everyone knows new clients are the most resource heavy in the first three months of their engagement, and the cheapest sale to acquire is from the customer that is already buying.
So why do we make things so hard for ourselves?
We are so wired to seek novelty that we often forget about the hidden growth that lays in the opportunities that are already within arms length — namely our retained clients, re-engagements, and referrals.
We’ve been led to believe it’s all about acquisition, but I promise that if you spent 20–30% less focus on any of your clients, the cracks in that relationship would immediately start to show.
However, the biggest thing I’ve learnt is our marketing efforts only need to focus on four areas, and we need to have a predetermined percentage of focus allocated to each one that is aligned with the business goals for the quarter.
- Acquisition — How do we consistently shifting prospects into paying customers.
- Retention — This is all predicated on meeting the outcome and experience that our clients seek.
- Re-engagement — what other offers, products, and/or solutions do they need? How else can we deliver value and build the relationship (and lifetime value).
- Advocation — how do we encourage others to talk about us, and position ourselves as a solution. This can be clients, personal networks, and strategic partners.
Tighten up #2 and #3 and revenue will sustainably increase.
Take that additional revenue and re-invest it into activities that foster #1 and #4.
Rinse and repeat and you’ve got yourself a marketing strategy that scales.
So, my question to you.
- How much focus are you putting on each category?
- Do you have specific activities and action for each documented in a plan?
Let me know if you need to be pointed in the right direction or need more clarification.
Zac
Ps. Full Disclosure, I made this mistake not once, but twice, where I basically lost 60–80% of my existing clientele in the quarter following my biggest month of newly acquired sales.
And although it took me a while (and a few more mistakes) to fully learn the lesson, I still credit this as my bounce back period being the biggest shift in my business, and the reason it is where it is today.