It costs between 5 and 9 times as much to find a new customer as it does to retain an existing one. Companies often go looking for new business when they should focus on re-engaging with their existing customers and offering those customers more value.
There are several ways to do this:
An important way to connect with your prospect or customer is to focus on them and their journey. Focus on serving them and make them the hero of the story.
At all times the product should offer more value than the price the customer pays for the product. This is critical.
The customer should always ‘win’. That said, it’s a great idea to move the customer up the ‘product escalator’ once your relationship has changed from a ‘website browser’ to a ‘paying customer’.
Again, this comes back to the customers’ needs. The customer’s needs come first. If your customer wants to buy your high-end product because that solves their problem, don’t force them through the ‘product escalator’.
It sounds silly I know, but I’ve seen businesses do this.
Don’t let that be you.
In today’s information age, time is increasingly scarce. It’s become a precious resource. If you can get your customer to commit time to you, that means a lot.
Focus on getting your customer to investing time with you through continuity programs, challenges, etc.
Don’t under-price your products (that can hurt your business)
If you went to see a heart surgeon and she offered to perform your surgery for only $10, I’m guessing you’d run in the other direction.
Price is a signal.
There are several other factors that influence the price. Have a listen to this episode where I spoke to Kyle Tully about pricing and how it’s perceived as one of the many factors when a customer buys.
Other questions (besides price) that customers are asking themselves before working with you include:
Your effective hourly rate is your profit per month/week/year divided by the number of hours you put in to generate that profit.
If your effective hourly rate is $100 per hour and you’re working on editing your own podcast episodes which you could outsource for $10 per hour, then you’re costing your business $90 per hour.
As an extension to the point above, understand what you’re good at and stick to it. If you try to get good at everything, you’ll spend all your time learning and not much time executing. As a business owner, your focus should do a few things well and hiring specialists to do the rest.
Besides the few things, you do well your focus should be on the business’ strategy and direction, team building and customer focus.
Trying to understand what specific problem your customer is trying to solve right now is critical. Build a customer avatar and create empathy maps. These will help you develop deeper insights into your customer’s journey.
Once you’ve done that think about what solving that specific problem means to the customer and how it will add value to her life. Understanding these things in great depth will also help you create better ads and write better copy.