What do you do when your revenue declines? What strategy do you use to attract more customers into your funnel? Is your business model an all inclusive one (by this I mean – do you treat both new and existing Loyal Customers equally)?
The usual thing we do to improve declining revenue is to boost sales… and to improve sales we need more customers, right? One common strategy for boosting sales that I know – is the use of incentives or baits (in form of discount to attract new customers)…
Giving out incentives to attract new customers might sound impressive and promising but it’s not a solid strategy to bank on if you want your business to stand the test of time. I am not insinuating that rewarding customers for patronage will affect your bottom line, the point I’m trying to get across to you is – do not limit your incentives to new customers, reward existing customers too.
To be honest, I feel bad each time I see adverts on my TV screen or on the internet with promise of some discounts for new customers and nothing for old (loyal customers) like me. I remember how sad I felt the last time I tried to renew the hosting of one of my websites, I had a coupon code for 50% discount but was told I am not eligible for the discount because I’m an old customer. This is but one of my many sad experiences of reward denials…
Whilst some businesses will state on their terms and conditions that certain incentives or supports are limited to new customers for a given duration, a customer centric business model should be flexible… You should be ready to bend the rules sometimes!
I want to challenge you to drift a bit from the norm and have a rethink about your reward system. Give more incentives to old customers than new ones. Take the opposite approach like a company I read about, this company is a boutique tour operator (specializing in high-end, trips to culturally rich destinations). They offer $500 discount to any new customer that signs up for a tour and $1000 to existing Loyal Customers.
Remember that “a bird at hand is worth two in the bush.” Consider treating loyal customers better! Bear in mind that you’re surrounded by social and jealous customers… If you continue with a biased reward strategy, your existing customers might decide to punish you by shifting their loyalty to your competitors. Think about it!