We’re concerned that you might be ignoring the most important people in your business life: your existing customers.
We know, we know. New customers are extremely important to your success. But as you try so hard to attract fresh buyers, you could be forgetting about your loyal customers who already brought you so much valuable business.
So What’s the Big Deal?
Most companies think of themselves as extremely customer-centric, but their reality rarely matches their best intentions. Their day-to-day efforts are focused on acquiring brand new business, fulfilling orders, and other activities that aren’t directly related to nurturing their existing customer base.
That’s a very big deal.
Your existing customers aren’t just valuable, they’re vulnerable. Customers will only forgive you for so long. If you focus your attention elsewhere for weeks or months, they’ll give you the old “See ya!” and find someone else who’s giving them the respect and attention they deserve.
And here’s something else to keep in mind: It takes five times as much effort to attract a new customer as it does to keep an existing one. Five times!
This means nourishing your existing relationships not only saves resources but also improves your profitability. So if you increase your existing customer base by just 5%, you could increase your profits by 25-95%, depending on your type of business.
That’s a game-changer, my friend!
Of course, you can’t just start increasing your prices overnight to get that 5%. Instead, you must put a strategy in place to keep your customers coming back, wanting more, and referring others to your friendly and successful company.
Let’s take a closer look at how to make that happen.
The 5 Non-negotiables of Customer-centric Businesses
To keep the focus on your existing customer base, you must relentlessly remain a customer-centric business. That’s why we’ve developed the five non-negotiables of setting up a stellar customer-centric flywheel.
Define who you are (the owner/leader of your organization) and who you are serving (your customers).
How are you and your team set up to serve your customers?
How are you intentionally valuing your customers before you ask for more value?
What’s your product value ladder to continue to serve customers?
What are you doing to reduce churn and close the back door? It’s important to remember the last stage of the inbound marketing methodology is just as important as the first: Promotors!
These five factors work together to preserve your existing customers as your priority, rather than treating them as an afterthought. No matter how busy you become in your day-to-day business, your five non-negotiables serve as reminders to stop and refocus on your core customers.
Showing Some Love for the LTV
Sometimes, especially with online-only businesses, there is so much attention on the front end of the business – new customer acquisition – that we forget about the people who have already heard and loved your pitch. These existing customers have some serious LTV.
LTV = lifetime value
LTV is typically calculated by:
- Taking the average customer purchase value in dollars
- Multiplying by the average purchase frequency rate
- Multiplying this result by the average customer lifespan
Customer LTV is a dollar-value prediction of the profit attributed to the total relationship with a single customer. It’s not just the value of their current purchase, or how much they bought from you in the past few years. It’s about their entire past, present, and future with you.
Here’s another way of looking at it. When you’re focusing on your brand new customers, you’re basically creating an ATM machine. Your ATM machine looks slick and it gives you lots of little bursts of money, but then what? It’s just an ATM.
When you focus on the LTV of your existing customer base, you’re creating an asset, not just an ATM. This valuable asset holds immense opportunity to constantly infuse large amounts of additional revenue into your business – not just a few dollars here and there, but thousands of dollars in LTV.
Don’t Despise Your Small Beginnings
Finally, we’d like to remind you that it’s a blessing to be small. Small businesses tend to be nimble, innovative, and hard-charging toward success. Due to their small size, they still have the time and flexibility to listen to each customer’s feedback and provide personalized solutions.
So if your company is small, don’t hide it or feel ashamed of it. Use it to your advantage. Make it a priority to stay connected with your customers and value them individually, and they’ll thank you by continuing to do business with you.
Whether you’re running a $10,000 business or a $100 million business, there’s always time to listen to your best customers. Listen closely to what they’re saying and let them remind you why you’re great, they’re great, and your business relationship is thriving.
Think You’re Customer-centric? Try Our Tool.
Atomic Design & Consulting helps you easily measure your company’s customer support and service using a free online measurement tool. See how customer-focused your business really is and find fresh opportunities for growth within your existing customer base.