The Quest for Shiny New Customers

ON THE MIND

There often is conflict between businesses wanting to attract new customers vs. serving the customers they already have. It is typical for companies to measure projected growth by the number of new customers needed to generate a certain amount of gross revenue.

Companies can relatively easily figure the cost to acquire new customers as well as determine the expected revenue per customer.

For example, acquiring cable TV subscribers and figuring the revenue per customer is straightforward based on industry standards and the cable company’s past experience. On the other side, we know from our past research that customers today are more demanding, making it more difficult for businesses to satisfy the customers they have.

And therein lies the conflict. It can appear easier to generate new revenue in the short term by acquiring new customers, while it can take more effort and resource to satisfy existing customers.

The majority of senior executives and managers say that when it comes to serving their customers or clients, their organizations emphasize acquiring new customers while also trying to exceed their best customers’ needs, based on a nationwide survey by NFI Research.

The survey also showed that the worst customers can expect the worst treatment, with 90 percent of respondents saying they do not emphasize serving the worst customers and 95 percent of them saying they do not offer the best pricing to them.

However, the best customers may not feel they are the best, as only a quarter of companies emphasize the best pricing for their best customers, though some are made to feel they are at the top of the list.

“When our vendors talk to us, they always position us as their best customer and say that we’re on their premier list, even though we know we may not be their best or premier customer,” said one survey respondent.

Said another: “All customers are valuable and should be treated the same, and that is excellent pricing and service. At our company, we build relationships with our customers and that’s what keeps them. Pricing is usually pretty standard but the customer service, which so many companies have lost focus on, keeps our customers and brings new customers through referrals.”

Everyone in business also wears two hats, as providers of goods or services as well as consumers of them, making each both a provider and a customer.

At the end of the day, it is all about the customer. Everyone in the marketplace is somebody’s customer and serves other customers.

“I feel a substantial deterioration in quality of service and customer satisfaction in the rush for market share,” said one respondent.

“As a customer, I find that my loyalty is rarely rewarded,” said another. “It seems the squeaky wheel does get the grease, in mobile phone contracts, at restaurants and even in company management through pay increases. There is little incentive to change because a loyal customer typically remains as such, until she leaves.”

Businesses should take care to make sure that in the rush to get new customers, the customers they have are being treated well. After all, new customers only remain that way for a short period of time.