Changing seasons, the weather, unforeseen circumstances – there are numerous causes for fluctuations in customer acquisition. In the first of our three-part series, Senior Sales Consultant Maxi Nelkenbrecher and Corporate Development Manager Marius Busen present strategies and best practices for successfully managing fluctuations in customer acquisition.
Fluctuations bring two challenges: Firstly, retaining customers acquired during an upswing. Secondly, bridging downswings with revenue generated from existing customers. Why is customer retention so important? The figures speak for themselves: A 5 percent increase in customer loyalty results in a 25 to 95 percent increase in sales (Reichheld & Shefter, 2000).
Bridging Downswings With Preparation and Flexibility
Preparation is key: You can usually see downswings coming. It is essential to prepare for them by retaining the customers that were acquired during the last upswing. Some downswings, however, hit marketers unexpectedly. In these cases, flexibility is required to quickly shift focus from acquisition to retention. But this is not an either-or scenario: To secure success in even lean times, both parts of the funnel should be balanced to generate sufficient sales with existing customers.
“Less Wrong Is the New Right”
Although sudden changes can be alarming, marketers should not be tempted to act rashly. The overall marketing budget should not be cut without careful consideration, but rather in a targeted manner, for example by focusing on specific segments or channels and dynamic pricing. To allocate budget sensibly, marketers need the necessary customer data and not every company is sufficiently well positioned in this respect. But it is never too late for analytics. It isn’t about being perfect, but about having a more accurate picture. The motto to bear in mind is “less wrong is the new right”. To find out whether marketing strategy needs to be adjusted, marketers must clearly distinguish between short- and long-term factors and analyze which of them are influencing the current situation.