This is not an “either/or” question, rather an
attempt to raise an organization-wide awareness and debate on the topic, which
appears to be mostly confined within the marketing organizations.
However, if I had to pick one, I'd say invest in nurturing the customers you already
have. In my experience, organizations spend way too much on acquisition and tend to treat retention as secondary - as long as net keeps growing, the numbers will (likely) be met.
Why nurture the current customers? They have
already made the choice, are paying your bills and stay because they like the service. However, as the customer base grows, there is often the challenge of scaling the infrastructure to continue to maintain the service levels. To keep the customers happy, you
need to invest in systems and infrastructure that support the quality of
service the customers expect. This may include IT systems, new talent, sales
policies, user experience design, etc.; whatever is needed to keep up with the scale
of growing customers and their expectations.
If you can deliver the high
standards of service consistently, you will be noticed. We probably offered
perks and incentives to bring the new customers in, but with the quality
service standards in place, we will continue to ensure that new customers don’t
feel slighted, when the initial euphoria of signing-up and “honeymoon” period
(free this and that for acquisition) is over.
Also, if you are considering product changes
and/or new offerings to expand the services portfolio, the current customers
can provide valuable market research insights, if approached in a right way. In
addition, customers will start to trust the brand and, in turn, may reward you
with buying your other products and services. That’s when we start to realize
the full potential of our customer base and gain a greater share of their
wallet. So, here are the top 5 reasons to nurture the current customers.
- They are here and paying the bills
- They can help improve your products and services
- They will be more inclined to buy your other “value-added” services
- They can provide precious market insights for your strategic programs
- They are and/or will advocate your brand at no cost to you
The ROI of investing in systems to sustain high
service standards, as promised in the marketing material, will quickly start to
show. Growth will then not be a one-dimensional look into how well your
acquisition efforts are performing.
