Most marketers only focus on customer growth. Good start, but not good enough.
American marketing guru Jay Abraham outlines three levers to growth in business:
Get more customers
Get customers to spend more
Get customers to spend more frequently
And I’m adding a fourth, get customers to stay with you longer
Most of today’s marketing focus lies on acquiring new customers.
Sounds good, right? Get more customers, grow the business.
Take a Telco I’ve worked with as an example. They have been successfully focusing on growth and acquiring many new customers, but they struggle to grow EBITDA. Their cost of acquisition is $600 per customer, but they only make $200 per customer every year and customers are signing into a two-year contract. They need to keep a client for three years to make money; many customers leave when their initial contract period is over as there is another deal in the market.
Take a moment and let that sink in.
When we started working together we focused on converting customers into profit.
Two things. We identified how to turn customers into Raving Fans and bundled services so customers would increase their spend while getting marketing leading value. So they got their priorities straight, and the profits came.
Sound like a familiar problem to you?
I have a solution.
My simple 3R’s Framework:
Repeat: upsell and cross-sell
Retain: increase customer lifetime value
Refine: simplify your offerings
Want to read more about it? Download a copy of my eBook about the 3R’s Framework here.