Customer Acquisition

Enterprises have to focus on attracting the right customers to try a product or a service. The right customers are the ones with the highest predicted future value and with the necessary propensity to be acquired.

Loyalty is about attitudes, in which we are somewhat interested. We are more interested in loyalty behavior. We view loyalty as an increase in loyal behavior when the share of customer is increased. It is customers coming back to spend more and for more things.

Purchasing behavior defines profitable and unprofitable clients. A company knows what its clients have bought, and it knows the price point at which they bought it. So then the company must dig down below to talk about what kind of profitability the customer has to the company.

A successful business has to identify the most profitable customers, nurture them, and retain them. Those customers allow a business to find look-alikes so it can begin to look for prospects from that customer base. The less-profitable customers are identified and are graduated and retained – and that is an ideal situation. The unprofitable customers are identified and hopefully graduate to profitable status. There are also unprofitable customers that will never be profitable, and an enterprise must allow them to disappear through attrition, which is very hard to do. It is counterintuitive. No one likes to lose business, but it is an important part of this equation.

In order to help our client companies acquire customers, we have to define what specifically is a best customer look-alike. Once that is done, prospects in the marketplace are identified. In our particular company, we have a complete vision of a marketing-focused data strategy: constructing and updating a database, accessing the data, analyzing the data, applying the knowledge and executing the programs. When we share this vision of what we do – this end-to-end approach – our customers don’t get stuck on one aspect of a solution. They get a chance to visualize what might happen next because very often they are being exposed to the next steps. They even may learn of needs and opportunities they otherwise did not know they had – or at least better understand where their current thinking may take them. Any enterprise should seek this same complete approach to their data – and have a customer acquisition strategy for RM.

For our own company, the proportion of high-value customers that continue to do business with us defines customer retention for ourselves. As with many organizations, retention for us has to do with order frequency over time and dollar amounts purchased. Targeting high-value customers and growing a base of long-term profitable customers is the goal, as is lowering the cost of acquisition.

Some clients want to establish a vendor relationship – in other words, “Go do this.” Other clients adopt a partner relationship and will sit down with us and tell us why they are pursuing the project, allowing us to help them perhaps figure out another way of getting it done less expensively and faster. It pays to know which customers are which, and to treat each customer accordingly