Are You Worth It?Posted: March 15, 2012
“Are You…?” Blog Series: Part 3
The Situation: You decide to increase your marketing activities and see results. New customers are entering your shop and buying product. Seems like things are looking up for you.
The question is: Will customers buy from you again?
In other words: Are you worth it?
Here’s where we left off after the last post in this series, “Are You Attractive”:
Consumers know your business exists. What’s better, is a large concentration of those who are aware of you are part of your target market. In fact, some of them have actually walked into your store (or clicked on your website) and purchased your product. They bought into your value proposition. At least once.
The trick, however, isn’t just to make a sale. No, we both know that the best thing is when they come back; when they like your product so much, they buy from you again.
Purchase and repurchase. The customer’s intent-to-buy again. We focus on the life-time value of a customer because it’s worth more to our business than new customers, and the cost of acquiring each new customer is diminished.
Which is easier and more cost-effective: getting one customer to buy from you ten times or acquiring ten new customers to buy from you once?
Whether you’re Pepsi-Cola or the local taquería down the street, up-selling and cross-selling to people already buying your product will yield higher profit margins than selling to new customers. And there’s a bonus to focusing on life-time value as well — increased customer satisfaction, promotability and referability (if handled correctly), creating a more cost-effective foundation for acquiring new customers. (By the way, click here for a great article on referability by Chris Brogan.)
If we want to increase sales, we have three basic options:
- Sell more to current customers.
- Sell a new product/service.
- Sell to new customers.
The simplest of these three — the “low hanging fruit” everyone alludes to — is selling more to your current customers.
“We focus on satisfying our current customers. That’s how we do things here.”
Great! I think we can all agree that it’s a lovely idea to satisfy our customers and have them buy from us again. But how do we convert a first-timer into a regular?
The trick is in the delivery — not just of the product, but in the entire customer experience, beginning with
(A) the first time they realize your business exists, to
(B) the time they walk in your store, to
(C) the moment they leave with your product in hand and a smile on their face (hopefully).
In fact, (D) the delivery of the experience extends into their home — in their use, or lack thereof, of your product — to
(E) your customer support, and to
(F) your engagement with them until death do you part.
Creating stronger alignment between each of these points of reference (A-F and beyond) to your point of difference (value proposition) will lead to greater conversion of first-time buyers to life-time customers. I’ve seen clients and cohorts nail the execution of alignment on A through E, only to strike-out on part F. Or worse yet, believe their work is done once they ask the question “Credit or debit?” We want to aim at increasing our customers’ intent-to-buy *again* because we cherish the life-time value of each customer.
Food for thought:
How can you extend your company/brand experience outside of your store into the customer’s home? What can you do for your customers that would both make them feel appreciated and appreciate being associated with your company?
Please feel free to leave your thoughts in the comments section below. I’d love to hear from you!
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