What is your Marketing Priority?
When a company owner or manager asks me….
What should our marketing focus on?
I usually state these four objectives, in order of priority:
- Retain your customers
- Grow incremental sales from your customers
- Get referrals from your customers
- Go after new customers
Although these may seem oversimplified, the fundamental principle of applying your marketing to hold on to what you have earned sets the stage for longevity and growth in the greatest companies that exist. Unbelievably, most small- to mid-sized companies tend to ignore the first three and focus primarily on the forth step: gaining new business. Most flat out refuse to survey for customer satisfaction.
The beginning of a relationship with a new customer is often the least profitable stage in the relationship. You might have to invest thousands in media to make prospects aware that you exist. In more competitive environments, you may also have to offer loss-leader discounts to compel new prospects to sample your offerings, in hopes they’ll come back in the future and buy at normal prices, wherein you can re-coup your initial investments. If they don’t like what you offer they first time, they won’t come back and you’ll be stuck trying to cover overhead and cost of goods on very thin margins.
Statistically, it costs an average of 1/10 of much to retain customers as it does to acquire new ones, so you might see why I think these are very practical objectives to always strive for.
I’m not saying that retention alone will be enough. Customers churn over time, and you must replace those that do. More customers usually mean growth. What I am saying is that keeping a consistent focus on customer retention will force you to improve, and will remind you not to assume they will continue to return regardless of your quality or service.
The more you improve your quality, the better your marketing and advertising will meet your expectations. Here is a good objective every business owner should try to achieve:
“Do everything you can to create a business that does not need marketing or advertising to survive and profit.”
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