In today’s podcast, David and Lisa talk about customer acquisition and then keeping that customer’s attention throughout the months or years.
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The cost of getting a customer
What a lot of businesses don’t think about is that you have a cost of customer acquisition — whether it be the cost of a going to a trade show or the cost of advertising. When you’re smaller this is inevitable, you’ve gotta do it, but once you’ve grown a bit bigger you can switch your marketing tactic to more of an offense/defense role in other words, acquisition, and retention. So what you want to do is take a look at your business. Is there something customers can come back for? For tangible goods, is there a warranty? Is there a newer version scheduled to come out?
What a lot of businesses are lacking in retention
David says that a lot of the companies he consults have a hard good that’s a one-time purchase, but lacks a follow up, so there’s so much money spent on getting that customer, they’re hoping they come back and find another item of interest on their website — and they often don’t.
Planned obsolescence is important
In your business you can always look at a new version of something, a new size of something, whatever it may be. This is related to “planned obsolescence”. An example of this is your smart phone, or car. Every year they usually come out with models that have minor changes here and there, but every few years or so a major model comes out — making the other model “obsolete” usually forcing people to keep up with the newest trends and models.
Other methods of retention
Another question is, what are you doing to retain your customers? You can set up a bunch of auto-responders, sending information to the client, NOT selling them, but engaging them. Rewards for using your good or service is also extremely effective. If you think about it, a lot of businesses whose services even you use, take advantage of that. Whether it be a restaurant, an airline, your credit card company, or even a pet store. David brings up that for example, if you do skincare, after a certain amount of products is purchased, you could give your customer a free bathrobe — something you don’t normally sell.
A lot of people talk about email and social media, but what many don’t do is actually call your customer. Let them know you’re there. Don’t just call them to sell, but call them from a customer service angle. If you take the time to care for your customer, they’ll build a loyalty to you.
The welcome back program
Here’s something most businesses don’t think of — build your database. If you haven’t had a customer that you’ve heard from in 90 days, call them to make sure things are working okay. David calls this a “welcome back program”. Because of this your customer service may potentially turn into a profit center. You’d be shocked to see how many customers you’ve potentially lost. If you can recover 10% or 15% that’s huge.