Ask any business what their main focus is and they’ll tell you this…
I hear it so often it’s no wonder so many businesses struggle or go bust.
“We need to find more customers”
I’m willing to bet this is something on your mind right now.
Don’t get me wrong, finding customers is clearly crucial to your business, but it’s only a fraction of the full picture.
Believing that answer is like reading the first part of a book and thinking you have the full story.
There’s just one small problem that you need to be aware of…
Acquiring customers is aways going to be one of your highest marketing expenses.
That’s why keeping them should be just as important if not more so. In fact, it’s the difference between the business you have right now and the business you dream of building.
That’s why I want to show you the two reasons why people stop buying from you.
(They’re both super easy to avoid!)
And in the process, you can actually get the people that buy from you in the first place, to spend even more.
Sound good?
Simply read on for more…
The Customer Code: How To Build Customers For Life
Naturally you’re going to lose customers, it’s part of business.
Say you lose 5% of your customers per year, would that make a difference to you?
Most entrepreneurs answer with “Probably not”.
I’m willing to bet that was the first thought that popped into your head too.
But here’s the thing…
According to Harvard Business Review increasing your customer retention by just 5% can have a major impact on your bottom line.
In fact, it could boost your profit by as much as 95%.
But it doesn’t end there.
The success rate of selling to a customer you already have can be as high as 70%, whilst the success rate of selling to a new customer can be as low as 5%.
And to top it all off, new customers can set you back five times more to acquire than retaining a customer in the first place.
So, are you starting to see why it’s so crucial to retain your customers as best you can?
That’s why understanding the reason people stop buying from you is so important.
There are actually two main reasons why that happens:
Customer Killer #1: You Stop Selling To Them
This is hands down the easiest fix.
Far too many companies look at their output rather than what their customers actually need.
So, their products and services are limited to either their imagination (or lack thereof), or their ability to simply create more products and services that offer more value.
That means their inability to sell more is actually baked into the DNA or structure of their company.
Yikes.
That’s why you need to understand that a percentage of people will always be willing to buy more from you.
You need to imprint that into your brain, because I’ve heard all sorts of kickback before:
“But my course is too expensive”
“This service is so niche”
“Nobody is going to spend this much on our workshop”
If you can offer value, a portion of people will keep buying from you in search of that value.
Do this right, and people will keep ascending until they reach the highest point of value you can offer them (usually reserved for your highest priced product or service, and the highest tier you can serve them at).
That means that people stop buying from you simply because you stop selling to them!
Do you have a framework or system that keeps people spending money with you over and over?
Customer Killer #2: You Offend Them
You’re trying to build a tribe of people who buy into what you believe, and ultimately you can connect with.
So, anything that comes in the way of that can lead to a disconnect, and is the reason why people stop buying from you.
Essentially, I think of this as when a customer gets ‘offended’.
What things can a business do to offend you?
Here are a few examples:
- Poor offers
- Lack of meaningful value (for example, previously purchased products don’t live up to the expectations)
- Overpriced products or services
- Shady business practices and a lack of transparency
- Dishonesty
- Poor customer service
- Personal beliefs (religion, politics etc)
- Changing core products / services after purchase
Think about the last time you stopped buying from a business, or stopped frequenting certain places?
More often than not it’s a case of being offended, and I’m willing to bet it was down to one of these reasons.
I often think about quite a prominent company I purchased a course from about 5/6 years ago.
They sold it to me as a lifetime offer, meaning that any updates they do to it I’d get access to.
They ended up adding so much to it that they started selling the updated version as a whole new offer. When I spoke with their customer service about it they told me they were now selling a “newer version” and I would need to fork out again for that if I wanted it.
I never bought from that company again.
How To Find Lifelong Customers By Doing Two Simple Things
Repeat customers are crucial, and in most cases its how you actually build & grow your business.
That’s why you need to stop the churn, and you can do it in two simple ways:
- Keep selling to your customers (and perpetually provide more value along that journey)
- Don’t offend them along the way
Keep those two boxes checked and you’ll build a monster business with more customers than you know what to do with!
Until then, here’s to customers for life.
Steve De La Cour
Founder & CEO
Kong
