Wallet Share Marketing

The Cost of Wooing New Customers

How much money does it take to get a new customer? How much does it cost to keep an existing customer? Marketing textbooks will say the ratio is 6:1 (in other words, it costs six times more money to get a new customer than it does to keep an existing one); however, in reality, the ratio is closer to 10:1. 

Marketers and sales professionals around the world focus on, and prioritize, new business.  Compensation plans are usually built to reward those that bring in ‘new’ business. 

What We’re Missing With Existing Customers

Unfortunately, rarely is their attention focused on keeping old customers happy and increasing their ‘wallet share’ marketing with new or expanded products or services.  And – this is big – rarely do we look to existing customers for testimonials, references, and referrals. 

Increasing Wallet Share Marketing

Let’s break this down.  All buyers go through a sales cycle that requires marketing planning to move customers from and to: 

1. Unaware (the ‘suspect’ is not aware of your company, your products or services) 
2. Aware (the ‘suspect’ is now aware of your brand, your products, and services) 
3. Interested (now a ‘prospect,’ they start to explore benefits and your value proposition) 
4. Research (now ‘qualified,’ they are asking about pricing and showing buying signals) 
5. Trial Purchase (they buy,  and… this is usually where the sales team disengages, and the customer is passed off to customer service where it is hard (on purpose with most companies) to get what they were promised.  Mobile Communications companies around the world are famous for this!) 
6. Use – Share (This where the gold is!  If you can create programs that target existing customers and make it ‘easy’ for them to do more business with you, they will buy more from you.) 
7. Use – Prefer (Here the customer is seeing value; however, they are not fully onboard and they need more ‘love’.) 
8. Use – Exclusive (You have arrived!  Customers here become your very best advertising and often will sell for you!)

What about utilizing the power of testimonials, references, and referrals? All human beings have a psychological need to reaffirm their purchasing decisions. We all do it by telling friends and family about a great deal we received or all the ‘features’ of our new purchase. What we are looking for in exchange is our friends and family to say: “Wow! What a great deal!”

Help your customers fulfill this mission by giving them the chance to give a testimonial, reference and/or referral. You will get warm leads at a fraction of the cost! 

Robert Murray is a Vancouver, BC based Business Strategy Consultant, #1 Best Selling Author, International Keynote Speaker, and TEC Top Speaker of the Year for 2018. For further advice, insight and inspiration on how to unlock your inner leader, follow Robert on Twitter, LinkedIn, and Facebook.

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