Mad rush for new customers, all the time

Although statistics, surveys and common sense reveal that it costs much more to acquire a new customer than to generate repeat business from an existing customer, most, if not all businesses, operate on a contrarian mode by going after new customers all the time while ignoring those who are already in their fold.

When I think about this phenomenon, I can see a very close connection with the usage principle that I wrote about just yesterday.  Just as it is easier to buy than use, it appears to be easier to acquire than retain customers. Keeping existing customers happy and satisfied calls for an ongoing  commitment that isn’t easy to do whereas a special offer can pull in new customers without much strain thereafter.

There is also another angle to this.  Most businesses treat their customers as mere transactions rather than as relationships.  Before you jump to accuse me of over-generalizing this issue, it will be good to recall the number of times you heard from a business which you patronized, be it a Computer, TV, Fridge, Car, Insurance, provisions …  (I am tempted to add Bernard’s comment in Yes Prime Minister saying that in round figures it is None).

There is a good friend of mine who sends 50,000 promotional sms every day to acquire new customers.  Yet he did not even think of letting his existing customers know about a showroom that his company recently inaugurated, although it would cost him next to nothing.  I suggested that he invite his customers to the new showroom and offer a token discount for their business and he has reverted that there are some enquiries from that quarter as well.

At the beginning of the new financial year, lets focus on our existing customers, for a change!!

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