Can bad marketing chase customers away? The answer is simply yes. Don’t believe me? Think about the last time your cable or satellite company sent you a “deal” for new customers only. Didn’t it make you at least think about switching? I am the worst case scenario. Every two years I’ll change cellular and cable tv providers to get the best deal going. Smart consumers do this, and smart consumers are your best advocates if you keep them happy.
Cable TV, Cell phone and alarm providers all use the same marketing tactics. The assumption is that the market is nearly saturated so the only way get new customers is to steal them from the competition. This leads to “customer churn” . Chun is a stupid expensive way to run a business. If the CEO’s of publicly held companies don’t care about churn, why should you? Quite frankly the CEO’s don’t care because they just tell tier board and shareholders, “Look, we got xx new customers last quarter and we made a fit so sign my bonus check.” Ironically the CEOs of these companies tend to churn themselves.
As a small business owner, you can’t afford to use these marketing tactics. Fortunately it is amazingly easy to avoid them. Simply put don’t send new customer offers to exiting customers. Send them deals for getting their friends sign up. Think more like a multi level marketing company and give incentives to your existing customers to help you get new customers.
The truth is a new customer is the most expensive to market too and the least profitable. Many cable and cellular companies don’t break even until the second year. Why not keep the customers you have and get them to help you get more customers? Done right this method costs less, reduces churn and increases profitability. The only person this isn’t good for is the CMO who justifies his salary and bonuses based on the size of his marketing budget.
All e-mail programs have a way to remove someone from the “new customer offer” list when they become a customer. Most Direct Mail companies will do this too. Why not take advantage of these features, and work less while making more?
I don’t know either. If you would like to talk with someone about how to improve your marketing, give us a call today.