Published on August 09, 2010 Existing versus new customers: getting the balance right
No business that wants to succeed online can forget that there are two ways of growing their sales: marketing to new customers and marketing to existing ones. What amount of money should be spent on either activity?
The answer to this question varies from business to business, but one thing is for sure: you need to do both. If you market only to new customers (e.g. offering a discount code just for new customer signups), this will make new customers happy but why should they order from you twice? If you have an existing customer who has made 5 orders and you offer 20% off just for new customers how will they feel?
At the other end of the spectrum if you focus too hard on advertising and promoting just to existing customers at some point you will be pushing those customers too hard. Unless your product is one that is repurchased regularly, customers will eventually feel that you are putting undue pressure on them to keep buying from you when they don’t actually want more of what you are selling. Balance is fine, and an essential consideration in your online marketing efforts.
The spend on gaining a new customer is substantially higher than encouraging an existing customer to buy again because for an existing customer you have already done the hard work and they know the quality of your products and services.
For marketing to existing customers, integrated newsletter management is something that will make things easy for you, and is something that you should look for in selecting a shopping cart provider.
One interesting thing to note that many businesses overlook when setting up their new customer marketing is that there are actually two different types of new customers: customers that are new to buying the products that you sell, and customers that have bought the products you sell before but previously bought them from competitors. Each will come with different expectations and you can’t forget about these things when targeting them. It even pays to decide in advance which of these you will focus on the most. If you are focussing on customers who are familiar with your products and have bought from competitors, you can promote the features and benefits of your products that stand clear from your competitors. Advertise and promote your competitor’s shortcomings. If you are focussing on new customers to the market, your approach will be more educational, focussing on the general benefits of the products and services and why your brand is better.
In all advertising and promotion there is another layer that you need to consider as well: the emotional versus functional nature of product advertising, but we’ll leave that to another post.
No Comments