What are your clients doing with your competitors?

Three good reasons why a portion of your marketing should always be focused on increasing client loyalty:

1) 2) 3)

The Pareto principle tells us that typically 80% of profits come from 20% of customers.

The cost of acquiring new customers is much higher than selling to existing ones.

Turning loyal customers into advocates can help you acquire additional business.

This is probably not a surprise to you, as it is typically covered in marketing courses and books, but how has the recession changed this?

Typically you will find that as markets become more competitive, price is pushed down more in new business than existing clients. A loyal client will not only be more sympathetic to your situation, but they will put a monetary value on an established, trusted relationship, making the 80/20 profitability rule look more like 95/5. A more competitive market usually increases sales cycles, making you spend more time, effort and money acquiring new business. With more bargaining power prospects will become more demanding, and your advocates can make all the difference to closing that opportunity.

It would make sense that marketers focused on protecting existing clients and the profits they generate. However, during the economical downturn in the early 2000s, 94% of marketing professionals admitted to cutting budgets allocated to customer satisfaction programs and research more than any other category. Marketing professionals cannot defend this spend when put under pressure; it is seen to be a bit of a luxury to invest in customer communications programs when additional revenue cannot necessarily be linked to it.

One of the top reasons why a client defects to your competitor is that they don’t believe you care. You may not gain additional revenue (although we argue that you absolutely could, just look at the AON/CORGI campaign), however cutting down on activities that make your customers value the relationship, will put your ‘bread and butter’ at risk. So the question is not how much will you gain from a client satisfaction program, but what are your clients doing with your competitors? If they feel you have become complacent, your customers are probably talking to your competitors and are ready to defect.

The AON case study shows how investing in a client communication program can invigorate a relationship AND increase revenue. Page 1  |  Page 2  |  Page 3  |  Page 4  |  Page 5  |  Page 6  |  Page 7  |  Page 8  |  Page 9  |  Page 10