Even for the best companies, customers come and go. For this reason, marketing strategies often focus on methods for acquiring new customers. However, such a narrow approach can lock businesses out of other important paths toward sustainable growth.
Generally speaking, the cost of acquiring customers exceeds the cost of retaining existing customers. Therefore, by expanding the scope of your marketing strategy to focus on existing customers, you can increase revenue while minimizing transaction costs and maximizing profits.
Renewing subscriptions, upgrading current customers, up-selling, and similar activities all represent marketing and selling opportunities that you should never ignore. These tactics focus on capitalizing on the value of a customer over the long-run rather than on initial conversions.
Adoption
In addition to the many customer-retention metrics that directly measure financial performance, you should also assess adoption, an indirect metric. Simply put, the adoption metric relates to the extent to which your customers actually use your products and services after buying them. Adoption means tracking what services or products customers actually “adopt”; tracking this metric allows you to closely follow what aspects of your company consumers are finding beneficial.
As a customer success metric, adoption can provide vital warning signs. After all, if customers never use what they have bought from you, they may never buy again. Similarly, enthusiasm after a purchase can dwindle, suggesting failed expectations or poor product support.
Optimizing for adoption
While measuring adoption, remember that the metric often depends more on a few particular features rather than a product in general. So, you might find out that optimizing for adoption is easier than it might seem at first.
Optimizing for adoption begins with a thorough assessment of every feature of your product, service, or process. Although this requires both time and effort, it can help you identify one or two factors, out of potentially dozens, cause your customers to “stick” with their purchase.
Moving forward
After completing your study, focus only on the features that you have identified. As a result, you have a fantastic opportunity to increase the bond between your customers and their purchases. As you improve adoption, your best customers will perform better by increasing the quantity and frequency of their orders. Other metrics will naturally also improve.
In conclusion, you can gain a lot by expanding the goals of your marketing strategy beyond customer acquisition. By increasing customer satisfaction and retention rates, you can dramatically reduce your selling costs while capitalizing on the lifetime value of every customer.
