There are three little words that virtually guarantee to increase your customer acquisition costs, erode customer loyalty and devalue your brand:
NEW CUSTOMERS ONLY
A “New Customers Only” promotion tells your existing customers that you value them less than people who have not yet given you their business. It tells your existing customers that they are being underserved, overcharged – or both. And it encourages your customers to look for a better deal elsewhere. In short, a “New Customers Only” promotion punishes loyalty.
All of this comes at an enormous expense. “New Customers Only” promotions reduce your margins, increase your customer service costs, limit your spending to actually differentiate your product/service and ultimately result in the (further) commoditization of your value proposition.
So why do these promotions exist? They work in the short term. But in all reality, they are an addiction dating back to the middle of the last century – the high point of mass marketing effectiveness. Ever since then it has simply been easier and quicker to “buy” new customers than it is to delight existing customers to the degree that they would become and remain loyal -- that is, turn down a better price to continue doing business with you. Absent that, it’s not loyalty, it's just repeat business.
Unfortunately, in our increasingly transparent digital world, buying customers with the promotion-du-jour is losing its economic attractiveness faster than you can optimize click throughs.
NEW CUSTOMERS EXCLUDED!
My two cents? Stop the new customer acquisition wars that alienate your good customers, eat your margins and commoditize your business. Instead, run "New Customers Excluded" promotions. That is, deliberately look for ways to reward the customers you do have...over and above the customers you don’t. Do that well, and your existing customers actually become loyal and rave about your business to the new customers you are currently trying to buy. The best part? In this hyper-connected world, your loyal customers will do it right away...and for free!
NEW CUSTOMERS ONLY
A “New Customers Only” promotion tells your existing customers that you value them less than people who have not yet given you their business. It tells your existing customers that they are being underserved, overcharged – or both. And it encourages your customers to look for a better deal elsewhere. In short, a “New Customers Only” promotion punishes loyalty.
All of this comes at an enormous expense. “New Customers Only” promotions reduce your margins, increase your customer service costs, limit your spending to actually differentiate your product/service and ultimately result in the (further) commoditization of your value proposition.
So why do these promotions exist? They work in the short term. But in all reality, they are an addiction dating back to the middle of the last century – the high point of mass marketing effectiveness. Ever since then it has simply been easier and quicker to “buy” new customers than it is to delight existing customers to the degree that they would become and remain loyal -- that is, turn down a better price to continue doing business with you. Absent that, it’s not loyalty, it's just repeat business.
Unfortunately, in our increasingly transparent digital world, buying customers with the promotion-du-jour is losing its economic attractiveness faster than you can optimize click throughs.
NEW CUSTOMERS EXCLUDED!
My two cents? Stop the new customer acquisition wars that alienate your good customers, eat your margins and commoditize your business. Instead, run "New Customers Excluded" promotions. That is, deliberately look for ways to reward the customers you do have...over and above the customers you don’t. Do that well, and your existing customers actually become loyal and rave about your business to the new customers you are currently trying to buy. The best part? In this hyper-connected world, your loyal customers will do it right away...and for free!
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