If your kids were starving, and you had a fishing pole and a couple worms, would you try your luck in some far-off exotic pond, or would you cast into the fishing hole that has always produced a bucket full of big ones? That’s why the most practical, most effective marketing strategy is to focus your limited resources on fishing where you know the fish can be found and where you know how to catch them.
I’m not saying that it’s a bad idea to take risks or explore new markets, but your best potential for marketing success is probably a whole lot closer than you realize. And, if you’re like most business owners, you’re neglecting that source while you look here and there for new opportunities.
Time after time, I’ve watched companies that do most of their own fishing in very productive lakes take envious looks at other ones. “Sure, we’re getting our fill of fish over here,” they reason, “but just imagine what we might get out of that one over there.”
It’s similar to the happily married man or woman who looks at someone across the coffee shop and daydreams about what a relationship might be like. Most married men and women know better than to try to turn that fantasy into a reality. Many business owners, on the other hand, seem to lack the internal warning that moving away from the known to the unknown isn’t always such a great idea. So instead of concentrating familiar resources in familiar places, they gamble on the unproven. Sometimes they get lucky, but more often than not, their dreams turn to disappointment.
For most businesses, the best prospects are a group they neglect when it comes to marketing. It’s their current customers. They already know who you are, and presumably, they like you well enough to do business with you. When you target current (or past) customers, you don’t have to use your hard-earned marketing dollars to introduce and explain yourself and struggle to get them to try you out.
Studies I’ve seen suggest that it costs six times as much to sell to someone new than to someone who already does business with you. So each new customer who strolls through your door costs you six times what it costs to bring a current customer back again.
That’s why it makes sense to focus a healthy portion of your marketing activities on retaining existing customers, giving them reasons to do even more business with you, and bringing former customers back into the fold.
(Of course, this philosophy doesn’t work for those offering a service that consumers are unlikely to repeat. I was very impressed with my last root canal, but I hope I never see the endodontist’s face again.)
If I asked you why customers stop returning to businesses, you’d probably offer one of several responses. Maybe they had a bad experience. Maybe someone else caught their attention with a better deal. Or maybe people are just fickle and disloyal.
From what I’ve seen, the biggest cause of lost business is benign neglect. Basically, companies just stop paying attention to their customers. They don’t mean to ignore them, but they become so focused on attracting new customers that the old ones no longer seem to be important. What happens next? One of your competitors attracts their attention.
The key to preventing benign neglect is to do something — anything! — to maintain and enhance your relationship with your existing customers. What you can do depends on the type of business and the nature of your relationship. If your business doesn’t have many customers, you can take a very personalized approach, with an occasional phone call, a note, even cards on birthdays and other occasions. A larger business may want to consider a customer newsletter, regular mailings of coupons, or similar offers.
No matter what method you use, be sure you thank your customers for doing business with you and give them some kind of reward for doing so. Worried about the cost of the reward? Don’t fall into the trap of paying so much attention to your pennies that you don’t notice the dollars heading out the door.
Most companies don’t think about current customers until they use most of their marketing time and money to try new lakes. Use a smarter approach and start your next fishing trip where you know you’ll find hungry fish. You’ll enjoy more success, and you’ll probably invest a lot less.