Most businesses have only three ways to increase revenues. They can work hard to get more customers. They can sell more to existing customers. Alternatively, they can sell existing customers more frequently. Regardless, increasing sales to your existing customers will increase your "share of wallet."
Because money spent for new client acquisition yields less and less in the modern marketplace, "share of wallet" has become a more relevant measure of success than "market share." Therefore, keeping and growing customers over time becomes more important than simply acquiring new customers. Indeed, selling existing clients more products or services, and doing so more frequently should be the number one goal of any company because doing so yields higher returns.
No wonder today's successful companies focus on retaining customers. If the primary goal is building long-term relationships and increasing customer loyalty, the resulting "share of wallet" will be higher margins and profitability. This kind of relationship marketing is part of the evolution currently underway from mass marketing to micromarketing. It's a revolution in managing individual customer relationships and it is accomplished one-to-one.
Most businesses have recognized that the velocity of business has sped up. Meanwhile "customer-relations-as-usual" has not proven to be agile, flexible, or fast enough to deliver the kind of results needed to maintain profitability. Therefore managing customer relationships "one-to-one," also referred to as "mass customization," has emerged as the new marketing strategy designed to hedge against eroding margins and customer disloyalty.
This evolutionary change is as much about necessity as it is opportunity. America today is a far more diverse and self-indulgent society than it was in the heyday of the mass market. Indeed, as you survey the marketplace you cannot help but notice that various market segments are not only defined by their demographics, but by nearly individualized product preferences. The driver of demand is all about products that are "right for me." So, forget the marketing hype. People want value. Value, like beauty, is in the eye of the beholder.
In today's marketplace innovations are so quickly imitated by competitors they rarely provide sustainable long-term advantage. Clearly, the most sustainable advantage any business can have is a strong market presence. In a time in which the informed customer is king, the concept of "image is reality" is dead. The revised formula for the smart marketer should be: "image + information + customer expectations + customer experience = reality."
If making and keeping promises builds trust, and it does, then marketing tools need to reflect the reality of your businesses trustworthiness. These tools are being found more and more in the form of specialized publications that can be focused on the unique needs of your customers. The most effective of these will be replete with peer-proof testimonials and linked to Internet and other customized information streams.
Many business people will tell you that it's much harder to develop a relationship built on trust than it is to sell something for the first time. Nevertheless, the resulting long term "share of wallet" far out-paces traditional new business focused marketing. Since customers are the lifeblood of any organization it's hard to understand any business that doesn't regard its customers as its number one priority and treat them that way. |
