️ Companies Reward Acquisition over Retention.
The structure of most businesses is set up to reward the acquisition of new customers.
️ In most businesses, the “stars” are the employees who bring in new clients, not the employees who keep clients happy after the sale.
The number of resources devoted to marketing and sales are enormous compared to those directed toward customer experience (Client success and Product experience).
The 2017 edition of the annual CMO Survey (conducted by Deloitte LLP, and the American Marketing Association) found that the avg. business spends 6.9 percent of total company revenue️ on marketing—and yet less than one fifth of that total spending is dedicated to customer experience activities.
Take a look at the illustration of the customer life cycle (️ Swipe left.)
Most businesses spend all of their time on the left side of the graphic. They try to increase the prospect’s awareness and knowledge of their brand, and then move the prospect to consider the offerings before the customer finally tries or selects/purchases the product or service.
This is the focus on marketing and sales efforts that is commonplace in business today.
Losing a customer costs a business in far more ways than direct revenue.
1️⃣ First, there are the sunk costs spent on acquisition that will never be recovered.
2️⃣ Second, for every lost customer, overall profits decrease.
3️⃣ Third, without solid customer retention, sustaining a business is nearly impossible.
4️⃣ Fourth, every time a customer leaves, team morale suffers.
A 5% improvement in customer retention rates will yield a 25% to 10% increase in profits.
Now ask yourself the following question:
How big would your company be if you still did business with every customer you ever worked with in the past?
#saas #software #strategy #growth #marketingstrategy #ux - 15 minutes ago