Customer Attrition – Where does it come from?

by James on March 23, 2009

Sales TweetCustomer attrition is a problem for many companies. Why, you ask? Could it be that their sales and marketing strategies are out of alignment? For example, I saw this Tweet this morning, which got me thinking about the relationship between Sales and Marketing.

Marketing and Sales are often tasked to bring in customers no matter what. Little or no consideration is given to how this is accomplished or the quality of the customers. As a result, expensive customer attrition drains the life out of the company. If you speak with lapsed customers I think you will find that a significant percentage, perhaps as much as 90%, of the loyalty problems can be traced to the sales process.

I’m not saying @TerryDean is wrong. What he is saying is absolutely correct, if you only look at the problem from a sales perspective. (So you know I’m not picking on him, @TerryDean is also an advocate for the importance of customers.)

Unfortunately, many companies only have a sales strategy, they only look at customer acquisition from this perspective. This is a huge mistake. Your business success is built on customers, especially when they are heavy category users, and to achieve a return on the investment required to acquire them, they need to stick around.

“The most important sales isn’t the first sale, it’s the second.”

Hip Shots

  • Develop a Customer Relationship Marketing Strategy to maximize the mutual benefit of doing business.
  • Align your Sales Strategy to your Relationship Marketing strategy. Be sure Sales is bringing in the right kind of customers. And be sure that Marketing is keeping the best ones happy.
  • Use your Best Customer profile to better understand what your best prospects look like and what will interest them.
  • Remember the 1st Relationship Marketing Principle, “Attract the right customers for the right reasons.”

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