Taking Customers Beyond the Honeymoon Phase
Comparing customer acquisition to dating isn’t a huge leap – you bring someone in with attractive offers and witty repertoire, but are you thinking about how you keep them? Are you putting in the same level of effort after prospects become customers? It’s at the point of conversion that most companies turn their focus to their next objective: landing another customer. Here’s why that MO is a no-go for your bottom line.
You meet someone new — and you put your best foot forward.
Like many companies today, the majority of your customer lifecycle marketing budget is probably focused on acquisition, so you have the resources you need during this getting-to-know-you phase. You’re anticipating your prospects’ needs, interacting with them through modern tools built to impress, and making it easy for them to ask questions and get answers.
This is going great. They commit, so you let your guard down.
Because of the high level of service you are providing, your prospects become customers. Naturally, they expect the rest of the relationship to live up to these high standards. What they don’t know is that only a small portion of your budget is dedicated to keeping them as a customer, so disappointment is likely coming. In a recent Forrester survey, B2C marketing decision makers indicated that 37% of their marketing program budget is spent on new customer acquisition, while in contrast, only 20% of their marketing budget is spent on driving retention of existing customers or upselling to them.1 How are you going to meet the high expectations you’ve set in the acquisition phase if your company isn’t as invested in the customer acquisition phase?
The honeymoon phase is over.
They way your customers see it, you stopped trying. After purchase, it’s a completely different experience. Your business is siloed by customer lifecycle stages, so you’re interacting with customers through an entirely different team and system than you did when they were prospects. Because of this, you’re unable to use valuable insights gained in the acquisition stage to improve the customer experience and maximize upsell and cross-sell opportunities.
She doesn’t know if she can trust you.
In a relationship, if you become a different person after commitment, your partner feels like the target of a bait and switch scam. The same is true with your customers. Anything less than the excellent experience they came to expect during the acquisition phase creates suspicion about your company and leaves the customer unlikely to consider you again the next time they make a purchase.
Now you’ve got to start all over again.
Back to square one: finding someone new and going through the process from the beginning. This is bad news, because acquiring a new customer costs, at a minimum, 5x more than the cost of retaining an existing one.2 And increasing customer retention rates by 5% increases profits by 25% to 95%.3 That lost customer just lost you revenue from repeat purchases at higher rates and from referrals.
But there is good news. By reframing your business strategy, knocking down silos, and investing in one customer engagement solution for the complete customer journey, you can provide a better customer experience throughout the customer lifecycle for a high return on your investment.
Don’t stop courting your customers after you have them in the fold. To learn more about the ROI of customer acquisition vs retention, check out One Customer Engagement Solution for the Complete Customer Journey.