Grow Customers: The Secret Sauce to Business Success.

I was talking to a business owner at a networking event last week and he excitedly told me how everything was awesome and he was loving every minute of his entrepreneurial life.

“If you could change just one thing in your business what would it be?” I asked.

“The amount of money I spend on marketing,” he replied.

“Interesting can I just ask what is the lifetime value of your customers?” I asked.

“What’s does that mean?”

Like many others in business, he was falling into the trap of focusing way too much of his time and budget attracting new customers, whilst ignoring the goldmine in his business; the customers he’s already got!

In his highly recommended 1995 book, 'Up the Ladder of Loyalty,' Murray Raphel describes the idea of leading your target market through a staged journey: suspect, shopper, customer, member, advocate and finally raving fan.

Getting customers, keeping customers and growing customers is all about building long term relationships; I suppose you could say it’s a bit like the dating game…

Step one: define your ideal partner, what traits, characteristics, values, behaviours do they have? How ambitious are they? How much do they earn (Turnover)?  Etc.

Step two: Once you have a clear picture in your mind, you would then start your marketing; where are you going to find these people/businesses in the highest volume, where would they hang out? Could be a dating site, golf course, gym, night club. They are now suspects, people who could potentially be interested, but are not aware you are in the market place and what you have to offer.

Step three: You would now start raising your potential partner’s awareness to the fact that you are available by making your presence felt in locations you would find them. Prospects.

Every now and then somebody will show an interest they will agree to a date. They are willing to give it a go and see what the experience is like. Shopper

Depending on that first experience they may be into the idea of having further dates. Customer

Once they get to know like and trust you and see the benefits of sticking around you they might be ready for you to pop the question and get engaged. Member

You get married this is for keeps. Advocate.

Settle down have a family and you all live happily ever after. Raving Fan.

Something for you to consider is in your budget, you have got a budget haven’t you? What percentage of your turnover have you allocated to marketing? How much have you allocated to looking after the customers you already have?

Studies have shown that 68% of customers take their custom elsewhere because of perceived indifference. Businesses go to the expense of acquiring a customer only to let them slip through their fingers by failing to work at building a long lasting relationships. Just as in the dating game this can be a very expensive exercise.

What processes, systems, and strategies do you have in place to move your customers up each step of the ladder of loyalty?

If your answer is little or none, how much is that costing you?