Your clients basically sign your paychecks. So if you think you don’t have a boss because you own your own business, you are sadly mistaken. Once you acquire a client there is a host of matters you and your staff must attend to in order to keep that client happy and returning to buy more of your products and services, which is a challenge in and of itself. Businesses invest hard earned bucks to maintain clients because everyone knows customer retention is far less expensive than customer acquisition. “Acquiring new customers can cost 5 times more than satisfying and retaining current customers (Alan E. Webber, Forrester Research).”
Customer acquisition long-term sustainability of a business Customer retention is obviously extremely important, but it is my belief that customer acquisition is even more vital to the long-term sustainability of a business. While no one questions that both are necessary, there has been a longtime debate about which is most important – to acquire or to retain. Interestingly, over the years I have been able to witness first hand that the focus on acquiring new customers must be hands down the first priority. An extreme but true example can be seen in the advertising world. Aldebaran Associates, the recruiting firm I (Lily Winsaft) started 14 years ago, places professionals in advertising, marketing, media, and public relations. The biggest mistake I have seen many agencies make is to put all their eggs in one or two baskets, feeding and nurturing less than a handful of clients. They hire staff and third party vendors to service and entertain these few clients, and they actually do very well… until the rug gets pulled out from underneath. Dozens of times I have seen agencies in utter despair when overnight one of their big clients decides to go with another agency. Since they didn’t do a good job acquiring new customers, they now have to face the financial impact, which includes firing staff and often going out of business. In our own business model we have discovered that if we do not focus on bringing on new clients, our sales pipeline suffers greatly and recurrent business from existing clients does not cut it if we are to reach our revenue goals. Lance Winsaft heads up our sales and recruiting team out of our office in San Diego.
