No business can exist without customers. The more the customers, the higher the profits will be. Marketing today is mainly focused on customer acquisition to improve the sales and with it the revenues. However, customer acquisition is not an easy task, especially with the modern customer who is sophisticated and choosy. They want more options and better services at lesser price and convincing them of your product’s usability and the company’s credibility is not an easy task. To achieve the desired numbers, you need a robust customer acquisition strategy that works. If your customer acquisition strategy is not delivering the desired results, is it missing something? If yes, what?
Let us find out.
Neglect existing customers
One of the biggest flaws in a customer acquisition strategy is to not include your existing customers in the acquisition strategy. In your attempts to get new customers, marketers often overlook the many opportunities that the existing customers bring to them. If you ignore or neglect the existing customers, then you will not be able to see the many customer acquisition opportunities that the existing customers reveal. A good customer acquisition strategy is one that focuses on getting new customers, while retaining the old ones and using their contacts to improve the lead and conversion numbers.
Pay attention to your existing customers’ behaviors and you will be able to identify lucrative opportunities they bring to you.
Improper lead management
Getting leads is not customer acquisition. To get a customer, you must make sure that the leads or prospects become paying customers. A better conversion rate is possible only when you are able to identify and understand prospective leads and manage them properly. Poor lead management is one of the things that most customer acquisition strategies miss. Once you get a lead, you need to offer them something substantial, something that they are willing to pay for. If you keep throwing the same marketing stuff at them, even the most prospective customers will lose interest in your business.
A study by Harvard Business Review has revealed that the profits of a business can grow by more than 20 percent, if they improve their customer retention rates by at least 5 percent. Understand that retaining a customer is more difficult than customer acquisition. That is why your customer management strategies should include both customer acquisition as well as retention. Retaining old customers becomes a possibility only when you engage them in meaningful interactions, instead of just giving them the old marketing talk. Customers value your business only when you have something useful to offer to them. Therefore, customer engagement is an important aspect of customer acquisition. You need to offer value not just to old and existing customers, but also new customers.
Measuring the wrong metrics
Another thing that could go wrong with your customer acquisition strategy is the metrics that you are using for measuring. You could be doing everything right. Following the trends in the industry and following the rules and have expert strategies at work for you. But still, you don’t see results. In such a case, the only thing that could be wrong is what you are measuring. Sometimes, you may not see the desired results only because you are not measuring the right metrics. For instance, most companies only measure the value of a customer by how much he or she spends on the products or services.
But what they may not see is how much the company has to spend on customers who bring in more revenue. If what you get is less than what you are spending, then a less spending customer on whom your business spends less or nothing is better than a high paying customer with high costs.
Inability to identify best customers
Continuing with the same example, let us take two customers A and B. If A spends $100 on your products but uses coupon codes, contacts the customer care and returns to the website only through paid channels (pay per click ads), which costs you say $150, and B spends on low-margin products at the store and spends $90, certainly B is a better customer than A and is more valuable to your business, because you have to spend less on him/her.
Once you are able to identify which customers are good and who are bad for business, altering your customer acquisition and retention strategies becomes that much easier.
This article was first published here.