By Brian Snortheim, director of alternate channel marketing, Time Warner Cable – Business Class
Most companies and independent agents are squarely focused on new business acquisition. Why shouldn’t they be? Growing the top line is critical in building a healthy and sustainable business. For those of us in sales and marketing, new business growth is not only a business priority, it gives us a strong sense of self-achievement. Looking at what new customer acquisitions added to the top and bottom lines at the end of the year is where we start measuring success.
But what about the existing customers? Are you focused on investing in a strategy to retain and grow that business? Many companies spend more resources on acquisition than retention – this is clear. But in these troubling economic times, your existing customer base should be protected and treated with as much importance as new customers. Likewise, shouldn’t your business plan reflect an approach that places ample investment in maintaining and retaining your base? By minimizing what’s going out the back door in customer churn you can more aggressively grow your base of customers and focus on quality accounts.
Here’s a case of a company that may be artificially measuring its success on new customer acquisition. I recently came across a new customer promotion from a telecom service provider. Significant rebates ($300-$500) were offered to new customers to break their current contract and transition their service. The surprise here was that there was no annual contract required to take advantage of the rebate. While this seems like a risky new business campaign with no guaranteed returns, there is a flip-side question to this: Does this same company invest the same monetary resources in customer loyalty and retention? Would they offer that same cash award as a retention rebate? The answer likely is, no.
To keep your brand top of mind with your customers, a multifaceted customer touch-point strategy should be implemented to not only drive customer loyalty, but to help grow these existing accounts. Your customers become more loyal if you’re routinely communicating with them and they feel you’re providing them a valuable service that your competition cannot easily replicate.
One could argue that in today’s competitive marketplace, a retention strategy that lasts throughout the customer lifecycle is the cornerstone to the health of your business. So next time you’re establishing quarterly or annual goals, be sure to establish success criteria and goals on retention. More importantly, match your investment in new business acquisition with that of retaining and growing your current customer accounts. Being one-dimensionally focused will hurt you financially, and help to feed your competition.