The Best Marketing Cycle
At the beginning of the last century, we conducted business on a very personal level. The marketing cycle was very close to the one we are proposing today. The completion of the loop ensured the profitability and longevity of the business enterprise.
Somewhere along the way the marketing cycle got lost. The emphasis was now centred on the side of acquiring new customers. We still see this today with businesses putting their whole attention on acquiring new customers with little to no concern for their existing customers. They also have the mistaken belief that it is all they need to do to grow their business.
Their marketing is often based around the traditional model of getting new customers by offering a lower price. Using just one side of the marketing cycle, i.e. traditional marketing is expensive. Not only is it costly but the yield is lower, putting undue pressure on sustainability and profit.
Traditional marketing while it is expensive is a necessary part of getting customers in the first place. It is five times more expensive to get a customer than to retain a customer. It does however •find prospects •acquires customers and • manages those customers. But it does have •high cost •high turnover and •the probability of sales is 5 -20%.
Relationship marketing on the other hand maintains customers and adds others to the list. It is up to 80% less expensive to keep a customer than to find a new one. A great upside is that referrals from that customer generally walk in the door at little to no cost. Relationship marketing •retains customers •generates incremental sales •refers more customers. It •lowers costs •lowers turnover •and the probability of sales is 60 – 70%.
Using these two together, you get a balanced situation. This takes care of and values your existing customers whilst acquiring new customers. It creates a more personal exchange making your customer feel more connected. They are more likely to remain loyal customers and refer you to their friends and associates.
By completing the marketing cycle, you have kept your customers in the loop. In my mind this is much better than abandoning them with linear traditional marketing.
Take a few minutes and watch this video as Cody Bateman, the CEO of SendOutCards talks about Traditional and Relationship Marketing.
Would like to know more about these concepts and how you can implement into your business? If so, please contact us for a FREE consultation.
Ron and Sue