Stupid Questions and Existing Customer Marketing
I ran across this quote from Scott Adams (Dilbert Creator) and got a chuckle from it:
“If there are no stupid questions, then what kind of questions do stupid people ask? Do they get smart just in time to ask questions?”
Of course as teachers down through the ages have suggested, the only stupid question is the one you didn’t ask (although having been in a number of corporate all hands meetings, I’m not sure I agree with that…).
So if the stupid question is one you didn’t ask, what stupid questions regarding your business are you guilty of?
Have you asked your customers what they want from you? Lately?
Have you asked where the growth in your business is really coming from?
Have you asked how you should best spend your marketing money – primarily on existing customers or on new acquisitions?
Although it doesn’t seem like it, this is leading to something. (no really…) These are hard questions – and not likely ones that you’re currently asking, but I believe that you should be asking them.
As an example, take a look at this Blog entry from the Inc. website: Do you focus on your Existing Customers?
Although it’s a short post, they make some great points about the criticality of Customer Service:
- It’s substantially cheaper and easier to get existing customers to buy from you than to get new customers to buy from you.
- Most businesses focus their efforts on acquisition rather than expanding sales within their base.
- This particular example indicates over 75% of revenue comes from repeat customers.
It’s not explicitly mentioned here, but generally new sales come with reduced margins and are generally less profitable.
This ties in really well to an ongoing conversation I’ve been having with a Sales and Marketing Analysis company here in Kansas City. The crux of it is that it’s pretty common for 80% + of revenue to come from the top 15% of your Customers and that your best bet to grow your company is to get your existing customers to buy more of your products (rather than getting new customers in the fold).
Obviously you don’t want to take this to extremes, but allocating your marketing budget at least partially towards your existing customer base will likely go a long way towards increasing your bottom line. It’s not the traditional line of thinking, but there’s a lot of common sense to it.
And building your bottom line is never stupid…!
What Stupid Questions are you not asking about your business? How do you treat your customer base today? Please share your thoughts here.
Shawn Kinkade www.aspirekc.com