Loyal customers are wife or husband material

Friday, October 23, 2015

Customer Acquisition is easy if you only count the initial sale. Think dating. Finding one night stands is easy. But getting someone who has wife or husband potential is difficult. Same goes with loyal customers. They are likely to commit for life, so they do not enter one-night-stands or try new vendors easily. And think how you would progress with a future wife or husband? Obviously slowly. And one-night-stand? Quickly. Now you got it, right? Track customer lifetime value and optimize your acquisition efforts against that, not just initial conversion.


Offers and discounts attract price sensitives

When you acquire customers with offers and discounts, what kind of customers are you likely to get? Price sensitive ones. People and companies who value big discounts and special offers. Customers who are more attracted by the saving itself rather than the actual product.

What are your changes to upsell or build long time relationship with someone who is always looking for a better deal. Slim.

So why do marketers do discounts and offers? Because most think all new customers have the same Customer Lifetime Value (CLV or LTV) than existing ones.

Promotions attract unloyal

Promoting your product attracts new customers. The more you promote, the more you’ll attract. But not always the right customers. Those that are easiest to win, are those who are likely to try new things. People and companies that are willing to try new things seldom love you forever.

You are probably familiar how innovation is adopted. First something is bought by innovators, then early adopters, then early majority, late majority and finally laggards. You may have seen that bell curve million times, so I won’t repeat it here. But it’s not actually a bell curve. There is a chasm, as Geoffrey Moore wrote in Crossing the Chasm, between innovators and early adopters. And that chasm is a graveyard for many products. They got early success with innovators, but fail to cross the chasm to attract early adopters while starting to backing from the innovators as they have already fleeing for the next big thing. Innovators are lousy customers to build a business on, unless you can use them as a stepping stone to early adopters.

The same applies to all new things, not just innovations. Think e.g. fashion. Trendsetters set trends, but if it’s too odd for mainstream, the fab will just die off. Or consulting. There is always the latest fab in consulting. Many big enterprises try out the latest business theory fabs, if just as a pre-emptive strategy. But few make to mainstream.

Easy to win customers are also easy to lose to your competitor

Some customers are easier to win than others. Maybe the have a bigger need or your product is such a good match in that market. Great! Or maybe it’s just because they are easy to speak over by your slippery salesperson. If that’s the case, then they are also easy for your competitor to win over.

Expertise requires trust, and that is a good thing

If you win customers because of your expertise, congratulations. Expertise is not a marketing promise. It requires lots of hard work to build. And there is still a long way from having the expertise into where customers trust and value your expertise. That trust is hard to win and easy to lose. False or exaggerated marketing claims, bit sleazy salesperson focusing too much to the next commission check is all it took to lose it.

Luckily expertise is surprisingly simple to scale. There is thing called Content Marketing. It’s perfect match for scaling expertise.

Relationships are build slowly

Everything doesn’t have to be fast. Best things in life happen slowly. Best meals are never fast food. Best wines have slowly matured decades. Best friends are forever. And best customers are loyal, long time, customers.

Loyal customers are not easy to acquire. These customers, consumers or corporate buyers, live complicated lives and prefer to keep things simple on vendor-side, buying from selected trusted few. Some are willing to try new things, yet willingness to give you more of that budget takes lots of nurturing. You have to be worth it. Some are not even willing to try new vendors. Lots of persuasion to show you dedication is needed just to get a change.

Is it worth it? Like slow food, typically well worth the effort.


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