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.
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