MARKETING TOOLBOX
GETTING NEW CUSTOMERS IS HARD ! Focus on Keeping Them for Long-term Growth
It is easy to be mesmerized by the beautiful sounds of cheap and easy new customers, but in 99 percent of cases, that's absolute BS. In your business career, what has lasted that has been super easy? When someone tells you, “Give me $1, and I’ll give you $5 back,” you know, deep down, they are not being truthful. They aren’t going to take your dollar and do all the work so you can sit on the beach. It would be nice if that’s the way it worked, but that’s not reality. When a customer cancels, it’s exhausting and difficult to find new customers, and it’s for this reason that cancellations are the bane of business growth. In the last few years, I’ve gotten to know the CEOs of a couple companies that make 100 million dollars or more per year, and you know what they focus on? Their churn (cancellation) number. They lose sleep over it, they fight to keep their customers, and they make plans and spend millions from the budget to make sure no one leaves. But why? It’s what I’ve been saying all along: Getting new customers is hard. They know they will never hit their growth goals without keeping a close eye on the number of customers who walk out the door. Many times, when us small-business guys hear about things big-business guys are doing, we ignore it. We tell ourselves that they are so big Cancellations are the bane of all businesses.
I just finished seven weeks of grueling travel for speaking events, networking opportunities, and meetings with prospects and partners. To be honest, by the time the seventh week hits, this amount of travel sucks. I do this seven- to eight- week jaunt twice a year, once in the spring and again in the fall. And in between the long travel seasons, I typically have one or two additional trips each month. It can be exhausting. The good news about the travel is that it can also be a lot of fun, and most of the time, it’s profitable (but sometimes not). There are times when I can’t remember which city I’m in, but in my 17 years of being self-employed, I have yet to find anything that beats face-to-face meetings. There’s no better way to build long-term relationships and loyalty than breaking bread and having a few drinks with clients, which is exactly why I continue to do it. But this leads me back to my headline: Getting new customers is hard! Sure, there is that one guy in 10,000 who claims it's easy. Sure, you can find someone who can make a handful of sales on Facebook for $1.25 per sale. But for these exceptions to the rule, it’s difficult — if not impossible — for them to scale past a few thousand dollars in revenue. Sure, there are a handful of these types making millions, but they aren’t small-business owners or small service-based businesses (professional services or otherwise) like you. Why? Because getting customers is hard.
"There’s no better way to build long-term relationships and loyal clients than breaking bread and having a few drinks with them ..."
and that’s the only reason it works for them. But business fundamentals are the same for both large and small companies. Do you know your churn number year to date? What about last month? You will never achieve real, sustainable growth until you understand this number and budget to decrease customer churn, because eventually you’ll come to a point where you will be losing nearly as many customers as you add each month. When that point hits, you stop growing. At the end of the day, you have to accept that getting new customers truly is hard. But if you can figure out ways to keep them — and get them to come back over and over again to buy from you — you will see much greater success than if you only focused on acquiring new customers.
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