From 99 Marketing Traps and How to Avoid Them: A Survival Guide for Marketing Pros and Those Who Hire Them*
A long time ago (say twenty-five years, give or take), the objective for most businesses was to accumulate more customers. More customers meant more sales, more revenue, and more profit. It was simple. Businesses didn’t worry about repeat or back-end/add-on sales. Just find more prospects and sell more stuff … that was the ticket to business prosperity.
These days it doesn’t work quite the same. Finding more customers should still result in more sales, but not necessarily in more profitable sales, or in profit growth overall.
Over the last quarter century, the cost of acquiring new customers has risen dramatically. Since the dot.com boom and bust at the end of the Twentieth Century, focusing all or even most of your marketing resources on new customers has become prohibitively expensive.
That’s why mergers and acquisitions became such popular business growth strategies starting in the 1980s. It was simply more economical to invest in companies than in new customers. And the cost of finding and converting new prospects into buyers today is a lot higher than it was then.
If you’re still spending most of your marketing resources on new customers and wondering why your margins are so hard to maintain, … ah, yes, there is a correlation. And there is something better to invest in than new customers.
If You Know Anyone Who's Caught in this Marketing Trap, Here's How to Help Them Out.
The best way to avoid the “settling for customers” trap is to get out of the mindset that focuses primarily on harvesting new customers rather than harvesting bigger profits.
You shouldn’t be chasing after customers unless you are resigned to peddling commodities, and have aligned your business operations to that reality. (In that case, skip this book. Study Walmart.)
Instead of more customers, what you need are more clients, and here’s the difference: Customers want an immediate solution to an existing problem or need, while clients want to be taken care of, both today and beyond, and are willing to pay more for that caring.
Customers buy a product or service expecting a specific solution to a specific need. They’re all about transactions, not long-term relationships. If the solution they need requires only a commodity, all the better: What’s your best price today?
But providing a commodity isn’t always going to be the best or right solution, even if the buyer insists that a commodity is all he really wants, and all he is willing to pay for. How do you sell a customer on the value of a long-term relationship.
You don’t. You can’t. You look to attract clients who understand the value of long-term business relationships, and leave the customers to the commodity purveyors. Once you’ve been commoditized, it’s hard to protect your margins unless your entire business is geared to operate as a purveyor of commodities.
Most companies today haven’t committed to operating as commodity purveyors (nor have they even admitted to themselves that their offering has been commoditized). They’re at war with their customers, who want more for less, and most companies feel like they’re losing ground to their competitors, who seem to be willing to offer more for less no matter what it costs.
No wonder that acquiring new customers is more expensive – and less rewarding – than it was a quarter century ago. You attract customers with the right product (solution) at the right price (how low can you go?). You attract clients – and more importantly, keep them – by working from an entirely different and more profitable marketing perspective.
*Available now in both e-book and softcover versions.
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