7 Secrets for Developing Evergreen Customers
Customer acquisition is far and away more costly than customer retention, yet many companies place greater focus on developing business with new customers. Linda Henman explains how constancy is key in cultivating loyalty among existing clients.
In botany, we learned that an evergreen plant has leaves that stay green throughout the year. Unlike deciduous plants, which lose their foliage during the winter or dry season, the foliage of evergreen plants remains constant.
Like their botanical counterparts, successful companies take an evergreen approach to their client relationships, too. Conventional wisdom, which is neither conventional nor wise, would have us believe that customers buy because of cycles, the weather, the stock market or some other external factor. Successful leaders don’t buy that thinking. Instead, leaders of evergreen companies realize they must engage in constant attempts to make their sales perennial.
They also understand that the cost of acquiring new customers far outweighs that of keeping existing customers coming back. In fact, research tells us that attracting a new customer costs five times as much as keeping an existing one happy. The first rule of any business, therefore, should be to retain customers and build a loyal relationship with them, thereby avoiding customer acquisition costs. Yet, most companies continue to focus more on customer acquisition than retention.
Many of my clients have designated business development specialists who concentrate on getting new customers in the door and more money in the coffers. But these same companies also know that, if they want evergreen clients, everyone must assume the role of customer service representative. Here are seven secrets to success:
- Know your best customers.
- Hear their voices.
- Give them what they want.
- Don’t rely too heavily on a few customers, no matter how good they are.
- Innovate constantly, create distinctive and breakthrough products, and become the company your competitors can’t ignore.
- Help your customers improve their businesses.
- Spend 90 percent of your efforts and resources on external issues and only 10% percent on internal processes.
Botany taught us about evergreens, and accounting taught us about the “Rule of 72.” As we remember, if you invest $1 at 1 percent interest, in 72 days, you’ll double your money and have $2. Similarly, if we improve in consistent but modest ways, we can be twice as good in a very short period. You don’t need a huge change initiative, just a commitment to hear your customers every day.
