Deliver Magazine July 2005Date Submitted: 7/15/2005

There’s an old adage in the business world that goes something like: The purpose of a business is not to make a sale, but to make and keep a customer. Too bad no one’s listening.

For all the talk about improving loyalty and building “relationships” with customers, marketers seem to be addicted to the sell. Sure, we all talk the talk about how it costs more to acquire new customers than it does to keep the ones you have. But look at where we’re putting our marketing dollars and you’ll get a whole new perspective.

Study after study points out that more money gets spent on acquisition than on retention. For example, a recent study for Tivoli Partners found that four out of 10 marketers spend less than 25 percent of their marketing budget on retention. Only one out of 10 spends 75 percent or more of their marketing dollars to keep the customers they have.

As marketers, we’re addicted to the chase. We’re so focused on getting that next sale that we too often forget about the need to continue servicing the customers we already have. After all, isn’t that the job of somebody in customer service?

Communicating with customers may be one of the least-valued aspects of marketing, but it certainly has a higher payoff. Look at the numbers and you’ll find that most of the sales a company generates come from its existing customer base.

If retention isn’t at the core of your marketing strategy, it should be. We bet your competitors have figured this out. Maybe they’re reaping rewards right now while you’re reading this. Don’t just make a sale; make a customer.

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