In Joe Jaffe’s new book, Flip the Funnel, he explains why customer retention is the new acquisition. And why shouldn’t this be the case? In any low level college marketing or advertising course you learn that it is much easier and less costly to retain existing customers rather than trying to acquire new ones. It’s also common sense that someone who has purchased a product or service before is more likely to purchase again than someone who has never purchased that product or service before. So where many companies are focused on getting new customers you should be focused on making sure your loyal, existing customers are happy. As the old saying goes, “A person who has a positive experience may tell one friend; a person who has a negative experience will tell ten friends.” This is where social media comes in.
In today’s age of Twitter and Facebook, people who comment about experiences with companies do not just tell a few friends, they let all of their Facebook “friends” know and tell all of their Twitter “followers.” Those people may in turn retweet that information to all of their followers or friends and so on. So, in the case of a negative experience this could prove very bad for a company if it does not hear of the situation. This could happen to a company who focuses most of their budget and effort on acquiring customers through mass marketing channels. Whereas if you budget for internet marketing you can monitor social media and be alerted when your products or company are mentioned. So, if you see a negative Twitter comment, you can act on it by contacting the customer and resolving the issue before it gets out of hand.
Social media should also be used to build relationships with customers. Create a digital community and reward loyal customers. Good customer service can turn many customers into brand loyalists who feel emotional connections to the product. Customers who feel connected to a product will not only promote that product but will also come to its aide in hard times. “We need to encourage and engage in dialogue by providing our customers with multiple ways to contact us at will,” says Jaffe. By improving the customer experience you will improve sales and the brand image as a whole.
