Over the past five years, the cost of attracting new customers has almost tripled.
Without going into details of the methods of the assessment itself, but recognizing this trend, we will think about what to do with it. It doesn’t matter what you do, selling cars or pizza, the growth is not so much competition as the level of information noise around forcing companies to constantly invest in attracting new customers – not only time, but also money.
What is curious is that the basis of this cost increase is completely on a growing market or your growing ambitions. The main reason for this need is that customers find the first experience with your product unsatisfactory. And they just don’t come back.
This is the most unpleasant thing that should be drawn from the need to constantly increase the budget for attraction. If the business is set up correctly, such budgets tend to decrease if it is not about expansion or launching a new product.
Common practice: an opening restaurant, agency, service center (talking about small business, of course) – they feel the need to attract first customers, but then they often turn off advertising activity: they have enough customers who have become regular customers. Take a look around such businesses is not so small. This is the work of word of mouth, which is also not free.
It’s simple: you put a “promotion budget” not in communication channels, but in your consumers. Giving them a little more than expected, which is the reason for starting such a mechanism. The only problem is that by giving too much, you can achieve the opposite effect – they will hide you for fear of deterioration in the quality of the product during growth.
But, yes, sometimes to make your product better is a sure way to reduce the churn of customers and, at the same time, save on promotion. By reinvesting in consumer experience what you are investing now in advertising.
It sounds like science fiction until a calculator falls into your hands. And then it turns out that making a gift to a client is much more effective than spending money on advertising. Coverage will be much less, but “touch” – much deeper. As a result, this is not only one satisfied customer (and your 3-5–10 future sales), but also his environment, to which you were recommended.
This approach has many advantages. And this means the ability to accurately focus your proposal, the ability to very accurately draw a portrait of the audience already within the target situation. But here is the problem. Absolutely irrational barrier, which is very difficult for an businessman to cross. He will gladly give money for advertising on the network, SEO-promotion, etc., but to force himself to just take it and donate what has been done, what can be sold …