Companies need to think of how they will retain their customers for the long haul. As it costs far less to retain an existing customer than going out and finding new customers, companies need to cater to their existing users. These customers need to hear from your company more than once a year in a invoice asking for a maintenance renewal or a new upgrade that they have to pay for.
Don Peppers and Martha Rogers (who coined the 1 to 1 marketing strategy term) wrote a book about Return On Customer - where they discuss how to get the most value out of your customer in the long run. They focus on using the typical ROI (Return on Investment) formula for the ROI invested in each customer.
How many companies are familiar with how much they have invested to reel in that "big fish"?
In order to focus on each customer, you would need to know how much revenue they bring you and how much it cost you to acquire them or to retain them.
Though it is difficult to go through this exercise, it is very rewarding. Peppers and Rogers have 3 steps:
1. Uniform Tracking - This needs to be in place to track the advance of a company from the point of being a prospect to the time they become a paying client.
2. Marketing Allocation - This should be in place to know the cost per lead (COL) in a marketing program, but you may have to add in cost of a sales rep that may follow up with the client, a pre-sales person that had to fly out to help with a proof of concept (POC), etc.
3. Revenue Allocation - This is the easy part. You should already know how much money comes in from each individual client.
This may sound very complex on paper, but I can assure you that the outcome far outweighs the pain during the research.
Feel free to contact me for help on how to do this.
About Me
- Alan Komet
- Having lived in the USA and Israel and having traveled the world, I bring you the news as seen through the eyes of an "obstacle of peace" - living his life in Judea in Israel.
Blog Archive
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2009
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July
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- On The Road to Commoditization
- It Had to Happen...
- The Future is Still Uncertain
- Customer Profiling
- Developing the Corporate Blog
- Exit Strategy
- Rethinking Business
- Pride - International Jewish Sports Hall of Fame
- Who's Next?
- What is the Price of Freedom?
- Seeing Your Key Messages Home
- Corporate Citizenship: What Happened to Capitalism...
- Meetings Are Indispensable...
- Salespeople Do Not Grow On Trees
- Am I in Focus?
- Multi-Partner Approach to the World
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June
(19)
- Process - Long and Laborious with No Short Cuts
- Experience Wanted
- Is Too Much Experience a Bad Thing?
- Decision Making in Business and Sports
- How Do You Prioritize Your Leads?
- Please Leave Your Comments
- Experience in a Specific Route to Market
- Stand Next to Me, I'm Lonely
- Hello, Can I Speak to the Customer, Please?
- Lessons in Job Hunting
- Words Are Worth Their Weight in Gold
- How Can I Work When I Worry About My Job?
- Finding Money May Get Easier
- How to Set Up a Channel Program?
- Think Like a Consultant, Act Like an Employee
- Is Too Much Experience a Bad Thing?
- I'll Gladly Pay You Tuesday For a Hamburger Today
- When the Siren Goes Off
- Revisit the Strategy
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May
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- Social Media (Web 2.0) - Is It For You?
- My Son's Sales Pitch
- Total Value of a Customer
- Understanding the World, Part Deux
- Understanding the World
- It's Hard to Say Goodbye
- Hard Time With Credit
- Deja Vu - I Think I Saw This Before
- Think About the Future, Not Just Today
- Do You Have the Resources?
- To Channel or Not To Channel
- Where, Oh Where Have Our Marketing Dollars Gone?
- If You Build It, They Will Come - Prayer, Not Stra...
- How to Hire Good People?
- Requirements for the Role
- Israel Business Management
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July
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My Blog List
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Turkey: After Israel, Harvard2 hours ago
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Shavuot Goodness Redux5 days ago
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About me...2 years ago
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