Client relationships are critical to the success of your business.
Your clients basically sign your paychecks. So if you think you don’t have a boss because you own your own business, you are sadly mistaken.
Once you acquire a client there is a host of matters you and your staff must attend to in order to keep that client happy and returning to buy more of your products and services, which is a challenge in and of itself. Businesses invest hard earned bucks to maintain clients because everyone knows customer retention is far less expensive than customer acquisition.
“Acquiring new customers can cost 5 times more than satisfying and retaining current customers (Alan E. Webber, Forrester Research).”
Customer acquistion long-term sustainability of a business
Customer retention is obviously extremely important, but it is my belief that customer acquisition is even more vital to the long-term sustainability of a business.
While no one questions that both are necessary, there has been a longtime debate about which is most important – to acquire or to retain. Interestingly, over the years I have been able to witness first hand that the focus on acquiring new customers must be hands down the first priority. An extreme but true example can be seen in the advertising world.
Aldebaran Associates, the recruiting firm I started 14 years ago, places professionals in advertising and marketing. The biggest mistake I have seen many agencies make is to put all their eggs in one or two baskets, feeding and nurturing less than a handful of clients.
They hire staff and third party vendors to service and entertain these few clients, and they actually do very well…until the rug gets pulled out from underneath.
Dozens of times I have seen agencies in utter despair when overnight one of their big clients decides to go with another agency. Since they didn’t do a good job acquiring new customers, they now have to face the financial impact, which includes firing staff and often going out of business.
In our own business model we have discovered that if we do not focus on bringing on new clients, our sales pipeline suffers greatly and recurrent business from existing clients does not cut it if we are to reach our revenue goals.
Fortunately, times are changing and many agencies have now created business development roles responsible for going after new business on an ongoing basis.
Across the board, roles in demand generation, inbound marketing and customer acquisition can be seen in abundance on job boards. Late last year I attended the HubSpot Inbound Conference 2016 in Boston. Twenty thousand professionals converged in one place to talk about the importance of customer acquisition.
HubSpot develops and markets software products for inbound marketing, which is a rapidly growing industry. As stated in a 2015 article in Huify, “Inbound tools are ideal for attracting qualified potential clients and converting them into sales.” Last year, about 20% of the searches Aldebaran Associates worked on included “HubSpot experience highly preferred” in the job description.
Hopefully you are now a bit more convinced that the pursuit of new customers must be a priority for you if you are going to manage and sustain your business in a profitable way for the long haul. Because customer acquisition is expensive, it’s valuable to understand the things to do and not do in order to more effectively manage your budget constraints while still being successful in bringing new business through your doors. In some ways, knowing what not to do is easier than knowing what to do.
Next- 5 behaviors you should avoid when creating a customer acquisition program