Below are the seven deadly sins for any entrepreneur or marketing director. Brands that can avoid these mistakes can gain a serious leg up on their competition.
Mistake 1: Not Knowing What a Customer is Worth
Often I come across a struggling brand and during our discovery session I’ll ask the simple question, “So what’s an average customer worth to you?” The response that comes out first is rarely the number we reach at the end of the discussion. Usually I’ll get an answer that’s an average invoice or receipt amount.
At this point I’ll ask if they ever have any repeat business from their customers. Of course the answer is, “Yes.” Now our tally is starting to inch up. Next I’ll ask them how long these customers stick around for, so we can establish their lifetime customer value (LTV). At this point I’ve really got them thinking.
Then I ask a question that even the sharpest ones rarely account for. Do they ever refer their friends and family? Queue the head scratching or chair lean backs.
You see, until you have the numbers right on what a customer is actually worth, there’s no point in trying to figure out how much you should spend on marketing to them. There’s also no way to accurately gauge their impact on your bottom line, or to what means you should go to retain them.
Mistake #2: Forgetting to Keep Track of Marketing Results
Many companies and brands aren’t tracking their marketing results and don’t know what is working and what is not. They are throwing advertising dollars around, and just hoping for something to work with no plan in place. How do they know where to put their money the next time? I assume they must like gambling.
I get answers like, “I think we got a few new customers from the last direct mail campaign we ran,” or “I know we got some calls, but not sure where they heard about us.” This is a dangerous game to play and one that is sure to close doors sooner than later.
Mistake #3: Thinking Throwing Money Around Will Fix Things
This goes hand in hand with #2. Often, clubs that aren’t tracking what is working start throwing marketing money around when it’s not. When membership numbers drop, they start to place ads in the newspaper, dump some funds into an AdWords account, or start sending out weekly email blasts all of the sudden. With no plan, or way to track, they think that members will just start flowing in. Unfortunately, it just doesn’t work that way.
Mistake #4: Not Having a Great Loyalty Program or Re-Marketing Program
Loyalty programs do exactly what they say, keep customers loyal. It gives them a reason to keep coming back. I strongly recommend you find some ways to implement them in your marketing efforts.
Re-marketing programs directed at former customers often yield great results for little cost. My own business consultant told me on the first day we met that the easiest person to sell to is the one who just bought. It was true then, and still holds true today. Past customers are familiar with your brand, and barring the circumstances where you’ve severely offended them, they probably would at least consider coming back if you asked nicely enough.
Mistake #5: Not Defining & Speaking to that Audience
Your brand can’t be everything to everyone. That’s a good thing, you can use it to your advantage if you play your cards right. Many brands have an identity crisis because their ads say one thing, and that expectation isn’t met when customers come pay a visit.
Then there’s the message delivery aspect. Is your product line or service geared of 60+ aged individuals? It’s almost useless to put all your marketing effort into social media to attract them. You’d be better served with a direct mail campaign or daytime TV ad. Simple things like that make all the difference.
Mistake #6: Failure to Follow Up With Current Customer’s Needs & Wants
Brands could save a lot of customers if they would simply ask more questions. I hear marketing directors asking all the right questions at all the wrong times. They ask them when it’s too late, and the customers are already walking out the proverbial door. I suggest you send out surveys to continually take the pulse of your brand. Don’t think a simple suggestion box will do the trick either. It takes more. Ask them what you can do to improve their experience. Ask them what they would like out of your next product or service offering. Ask them tough questions. Even if you are uncomfortable with the answers you will be better equipped to fix the problems and capitalize on the wins.
Mistake #7: Failing to Figure Out What Their Competition Is Doing Better
It’s easy to stand pat and live in a bubble. It takes some effort to find out what’s working down the street. If you’re losing customers, figure out what your competition is doing better than you. If your brand has dynamite sales numbers, please still find out what you can do better. It’s arguably even more important during the good times because you can keep the momentum going and tackle your competitors at an exponential rate.