You hear it again and again: it’s 5 or 7 or even 30 times cheaper to market to current customers.
This ‘truism’ makes me cringe. The focus is on your marketing costs, not on the value to your buyers, as well as to your company, of investing heavily in your current buyers. How warm and fuzzy would you feel about a company you’ve done business with if they reduced you to cheaper marketing costs?
There are three high-value reasons to invest heavily in your current buyers:
- The more often a person buys, the more they are likely to buy from your company for the long term. Studies show that each subsequent purchase increases the likelihood of another purchase. Imagine the customer life time value of a customer who is your customer for ten years or more. That’s a powerful reason to invest your current buyers. Continuously remind them of your lengthy relationship (not transaction history) to keep them coming back.
- Current customers will have opinions about your offerings. They’ll also have ideas for products or services they’d like to buy, or new ways of buying. You can double or triple your revenue from current buyers by listening to them and giving them more of what they ask for. This is such an obvious benefit of current buyers, and I never understand why CEOs and Owners barely tap into this tremendous resource.
Meeting the needs or desires of your current buyers with improved or innovative products or new offerings reduces your risk of bringing those to market.
- The more a person buys from your company, the more likely they are to tell others about your company. This is so much more than an artificial referral. This is a solid, no holds barred endorsement to their peers of value. When these committed buyers tell their friends and colleagues about your company, those new people are most likely to enter your customer rolls at the middle to high end range of your offerings, rather than as tester for your low end offerings.
These three benefits of investing heavily in your current buyers can add up to dramatic revenue growth. I’ve worked on 500 revenue growth projects since 2000 and my clients have increased revenue by $20 billion. What could dramatic revenue growth do for your company?