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Who deserves your love?

14 February 2012 | Tim Hallac

Valetine’s Day is fast approaching and if you are in a new relationship or hoping to soon be in one, odds are that you have already been planning how to wine, dine and shower with gifts that special someone. If you married or in a long-term relationship however, chances are you are more likely to be grabbing petrol station flowers on the way home from work on the day.

It seems the same principle applies in business; everyone gets excited when a major new customer is secured. There’s a celebration, champagne, and lots of recognition and reward is given. Yet how much celebration occurs when a long standing customer renews for the fifth year in a row? You forget that they haven’t pitched out the work for four years and no pitching means greater margins.

It costs 3-5 times more to acquire a new account than it does to retain an existing customer; they also tend to spend more money and are more likely to generate positive word of mouth and recommendations. Getting your current customers to buy more from you also means it becomes harder for them to leave you due to increased switching costs.

Marketing can help sales increase account penetration by funding sales and marketing campaigns targeted at current customers. Too many companies miss opportunity. How many times have your customers said ‘I wish I had known your company did that… I would have purchased from you”? Marketing can change that and avoid missing out on potential new opportunities.

By monitoring key metrics, you will increase your chances for success:

  • Retention rates
  • Percentage of penetration by offering, by account
  • Level of awareness of each of your offerings

Once you have this key information, it is important for your business to focus on and evaluate the marketing and sales effort necessary to maintain your current customers.

Start all your marketing and sales efforts plans with the few customers who control your fate. It’s where the greatest returns on investments are made. The same can be applied to your relationship this Valentine’s day and make an effort regardless of how long you have been together.

So what’s it going to be – Texaco or Tiffany?!