Cost of a customer….

"Acquiring a new customer can be 5 times higher than the cost of serving old customers," according to Peppers and Rogers Group. Don Peppers and Martha Rogers are the "One-To-One Marketing" gurus that made Customer Relationship Management a buzz-word in the business world. They truly understand the value of customers.

It makes sense to invest in marketing that keeps current customers as well as attracts new prospects. In fact, a sound strategic marketing plan will address the needs of both. For instance good advertising and public relations will reduce the attrition rate by "keeping the customer sold." (A phrase I've borrowed from Kathy Marr at Cygnus Business Media)

According to the Harvard Business Review, a reduction of only 5% in customer attrition will boost profits from 25 - 80% (depending on the industry). Whoa! Those numbers get my attention.

It's easy to say a customer's value is the revenue they generate. but also keep in mind the intangible value of even the smallest customer: referrals, references, and repeat business. One of my tiniest clients has given me referrals that have far exceeded my expectations in both quantity and quality.

Think of ways to keep YOUR customers loyal.

Sorry, I’ve got to run to lunch. I just earned a free meal on my "frequent diner" card at one of my favorite restaurants. So lunch today is "on the house".

- Phil Sasso