In today’s business world, if you are a small or medium size business and you are focused on just market share you are in effect just chasing your tail. When you’re chasing market share, it’s based on the assumption that you are buying a product or service and then turning around and selling the product your customers.
However, if your mindset is now on buying customers, you are now focused on how much, how many, and for how long can you sell to each customer. We are moving from being product focused to being customer focused. The key here is customer loyalty.
Always remember, it’s more profitable to sell to existing customers than to market to new ones.
In my previous post we discussed how to determine the acquisition cost of a customer. Knowing the acquisition cost number is just the beginning. To increase our profitability, we must establish a long term view of the cost of your customers and their lifetime value.
It’s more profitable to sell to existing customers than to market to new ones. By knowing how much your average customer will spend over their lifetime with your business, you will begin to understand that true worth of your customer and the long term ROI (return on investment) of your advertising investment.
The goal now is to continue to test various headlines and offers to lower your acquisition cost and at the same time increase the lifetime value of each customer. By establishing this long term view of your customer’s value, you can begin to appreciate the importance and impact of good customer service and how costly poor customer service can be to your business.
Focusing on wallet share instead of market share will increase your business’s profitability because it forces you to be client focused. It forces you to focus on the client’s needs and how you can provide them exceptional service to keep them coming back again and again.
If you would like more ideas, strategies, and examples on how learn to attract passionate, productive, profitable people to your business team for greater synergy and success, please request our free E-Book “11 Ways to Double Your Customer Base in 4 Weeks” CLICK HERE to receive your Free E-Book.