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Marketing

The cost of acquiring new customers

Written by Jason Groom
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Originally published
July 4 2018,
updated
August 5 2020

Our love of Don Draper, the wise but fictional character of Mad Men fame, is well-documented. While the “What would Don Draper do?” (#WWDDD) hashtag is now rarely seen, it doesn’t mean many in our profession don’t still rely on his sage observations and experience for a marketing and advertising steer.

“Sometimes you gotta dance with the one who brought you” is a favourite mantra. Essentially about courting existing customers, shoring them up and engendering loyalty, rather than chasing new and often elusive ones, it sprang to mind again recently.

 

A high price to pay

A recent HubSpot article on customer loyalty focussed in on the rising costs of acquiring new customers. It included some scary research showing that, while for marketers generating traffic and leads remains their top priority, the cost of doing so has risen by 50% over the past five years!1

The erosion of trust

Customers don’t trust brands, sales people and suppliers in the same way that they used to. And, let’s face it, they don’t have to. Instead they hold greater store in their peers, friends and family. Reviews are everywhere and easy to find, and social media gives access to recommendations and denouncements they’re more willing to heed. Our “telling” messages of old simply no longer work.

Access denied

Factor in GDPR, and its impact on access to and use of third-party data to reach those we don’t already have an established relationship with, and the distance between “us and them” is steadily growing.

Spare a thought for sales

Prospecting, aka “where sales and marketing collides”, is also no walk in the park. Getting a response from prospects, particularly by phone, is exacerbated by layers of decision making that conspire against our beleaguered sales colleagues. 2

The leaky bucket

A steady flow of leads then, if we can’t efficiently capture, nurture, optimise and hang on to them, is no different to pouring water in to the metaphorical leaky bucket we want to avoid.  Customer churn is our sworn enemy, but how can we prevent it?

Closing deals vs opening relationships

The HubSpot article puts it succinctly, the marketer’s role in retaining customers “isn't to close deals, it's to open relationships”. That perspective turns our old way of thinking on its head. We’ve been used to the lead or enquiry being our ultimate end-goal whereas, in fact, it’s actually only the beginning.

Delivering an opportunity should mark the start of a customer journey which relies on the marketing, sales and customer service functions to work in synch, not only to nudge the customer towards purchase but keep him engaged, happy and coming back for more. Which, ultimately, has got to be better and cheaper all round for everyone!

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