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The Existing Customers or the New Ones - What matters most?

What do you know about your Customers?

I know this sounds like a strange question to ask but I figure that regardless of your business it has merit. The life’s blood of your business efforts are clients, customers, consumers or what ever you’d like to call them. They are the audience and your job is simple, you want them you do business with you and keep doing business with you. All too often the idea for a business can become bigger then the customers and companies forget this.

Why do companies forget their customers?

Companies are always looking for growth and if they aren’t usually they aren’t around for much longer. A lot of the sales cycle in a company is all about attracting more people to the business some companies forget their most valuable asset… existing customers.

You may ask why an existing customer is so valuable. There are a few reasons but one main reason is that you’ve managed to convert them into a rare breed of consumer… one that “Trusts” your business enough to make a purchase. Therefore in theory it becomes easier to sell and resell to them. But as with anything you do in business you’ve now got to learn about your existing customers. Why do you need to learn about them? The answer is simple, you want to learn about them because you want to learn about their spending habits, their interests, likes and dislikes and be proactive in helping them find what it is they are looking for. In a sense… their business helps you and your business helps them.

The Cost of acquiring new customers

I’ve seen costs of acquiring new customers vary from business to business but one thing I can tell you is that more times then not it is infinitely more expensive to gain a new customer’s trust over developing a relationship with an existing customer.

Here is a brief definition of “customer acquisition cost”…

Customer acquisition cost is calculated by dividing total acquisition expenses by total new customers. However, there are different opinions as to what constitutes an acquisition expense. For example, rebates and special discounts do not represent an actual cash outlay, yet they have an impact on cash (and, presumably, on the customer).

Source: http://www.marketingterms.com/dictionary/customer_acquisition_cost/

Naturally your metrics will be different then a multi-billion dollar company but this is something to be aware of regardless of the size of your business because it affects your profits. Wouldn’t you feel better pouring money into people who already trust your business enough to buy from you? See the thing is, once you’ve got this existing customer you’ve got a lot of information to begin mining more information from them. Pieces of data you may have include…

• Date of their last purchase
• Item Name
• Time of purchase
• Geographic location
• Sizing information
• …And so on!

You may look at that data and say “okay, now what?” By looking at what they bought, what time they made a purchase, and even where they are geographically you can begin to test targeted campaigns specific to their individual needs, geographic locations, etc. In being so targeted you don’t waste half the time of converting interested parties into buying parties instead they become your loyal customers because you “know” them.

What would you like to know about your customers?

Now this question is for all you business owners out there. “What do you want to know about your customers?” Do you want to know the frequency that they buy in, how they like to pay when they buy from you? What products interest them? If you could find the answers to these questions over time spent marketing would this be helpful? Personally, I think it’s a Golden Opportunity that most business owners overlook. How many times have you bought something from an online store or a physical store and they just as soon forget about you? They don’t tell you about an upcoming Sale or they don’t remind you about an item you are interested in are now “in-stock” and the silly thing is that you would have spent the money with them gladly if you were informed.

So now I ask you, the reader of this article, possibly a business owner “what questions you’d like to know about your customers? What is your competition doing that you are failing to do? Or what do you think about existing customers in general?”

Lucas