In Keep Those Customers! on Inc.com Howard Greenstein says that companies focus so much of their energies on obtaining new customers that they ignore the customers they already have. Christopher Penn, Vice President, Strategy and Innovation at Blue Sky Factory Email Marketing, quantifies this perspective:
A good marketer in general can move 10% of the attention they create into qualified leads. With good customer retention, good service, good product, you have a huge amount of control about keeping your customers. They’re yours to lose.Not everyone agrees. In Dear Catalog CEOs: New Customers, Kevin Hillstrom at MineThatData.com points out that no matter how customer-centric your company is there will always be customer turnover. He addresses the idea of building customer loyalty directly:
If there were easy ways to increase customer loyalty, everybody would be doing it and loyalty would dramatically improve and the economy wouldn't be a mess, right?His suggestion: "Focus a disproportionate amount of time and energy on finding new customers." His point is that there are far more ways for companies to acquire new customers than ways for them to improve their customer retention rates.
A successful company should strive to both earn new customers and to please existing customers, but often resources are spread thin. Which should be the priority? Should companies give the majority of their focus to existing customer relationships or to creating new customers?
