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The Truth About Expanding Your Business

 
There are many marketing myths that have evolved over time. Marketing myth number one is, “The only way to grow your business is to expand your customer base.”

The truth is you need to have two marketing plans to grow your business -- one to extend your reach and influence to grow your customer base and one to retain and enhance the loyalty of those customers in your current customer base.

There are various surveys that claim it can cost anywhere from six to twenty times as much to find and attract a new customer as it costs to keep an existing customer happy and coming back for more.

So why advertise at all? Why not rely upon building the LTV (lifetime customer value) of each of your current customers?

The truth is, in spite of your best efforts, your current customer base will be eroded by 20-25% per year.

Most of the reasons for this erosion are beyond your control:

• Career moves and employment opportunities may cause customers to leave your trading area.
• Lifestyle changes from marriages to divorces and from changes in income to family size may change the needs or buying habits of some of your customers.
• Aggressive or new competition might steal market share from you.

The good news is, your customer retention budget need not consume much of your over-all marketing budget because the tools for keeping your customers in the fold are either no-cost or low cost. Tools like customer loyalty programs, social media marketing, and customer-service and sales training for your staff can help you keep your customer erosion to the minimum 20-25%

And, your customer retention marketing plan will also maximize your return on investment from your advertising and outreach marketing by enhancing the LTV (Lifetime Customer Value) for every new customer your advertising attracts.

Your advertising can keep you front and center with your current customer base to minimize the impact of new or aggressive competitors in your market.