Q: Competition in my field has gotten tight over the past few years. Digital marketing has leveled the playing field. At my age, it’s all really overwhelming, and I don’t know if I can keep up. But I can’t afford to retire yet, either. What do you think?
A: I think you are feeling something that many others have wrestled with as well. Technology has been changing industries since the wheel was invented.
This comes up a lot with my entrepreneur coaching clients as they, too, see e-commerce and digital marketing as the place they must extend their businesses. The real challenge with this thought process is that everyone else feels the same way. As a result, the digital marketing space has become incredibly noisy. What used to be an inexpensive way to reach an intended audience has now become a method marked with escalating costs, diminished returns and increased competition.
Although digital marketing absolutely has its place, let’s take a step back to gain a different perspective. Based on your question, I’m assuming that you’ve been in business for some time and that you’re not a startup. I will also go on to assume that you have a number of past clients who have been pleased with your service or offering.
What if instead of looking at what you are not doing, we focus on what you are doing and what you’ve done well?
Here’s what I mean: Look back at your career to date and gain clarity as to the reason that clients have done business with you from the beginning and why they continue to do business with you. Why do they refer their friends to you? What makes you stand out in their minds? What problem do you solve better than anyone else? The answers to these questions are incredibly important because they are your secret sauce. These are things that no one can take from you. These are things that you can build a massive business on.
You see, the challenge with trying to gain traction in digital marketing is that you are one of many attempting to get the attention of the same customer. In the digital marketing space, you are a small fish in a big pond. What if there was a way you could stand out as a whale in a small pond?
In order to become that whale, you have to ask yourself a key question: What systems do I use to consistently communicate with and nurture past and current clients? A satisfied current customer is worth more to your business than hundreds of prospective customers. Here is what I mean, courtesy of research by Invesp, a conversion rate optimization company, and the management consultancy Bain & Company:
- The probability of selling to an existing customer is between 60-70%, whereas the probability of selling to a new prospect is 5-20%.
- Existing customers are 50% more likely to try new products and spend 31% more, when compared with new customers.
- Acquiring a new customer can cost five times more than retaining an existing customer.
- Increasing customer retention rates by 5% increases profits by 25-95%.
My advice is to focus first on your existing and past customers. Focus on the communication with those people and your client retention and referrals will increase.
The pressure to have a presence in digital marketing is typically born out of seeing everyone else go that direction. Until you have a solid foundation and systems in place to be able to consistently communicate with your current and past clients, everything else is a distraction. Digital marketing is a useful tool when wanting to grow your reach or increase your customer base at a fairly large scale. This can be effective, but it comes at a big expense and requires a fair amount of time to convert those leads into paying customers.
Increasing your attention and energy on the client communication and nurturing aspect of your business will help you to create a business that produces more qualified clients that automatically have a higher level of trust for you and your offering. This means a higher conversion rate leading to more business in less time while dealing with clients that you enjoy working with—the kind of people who will make you not so eager to retire.
This article originally appeared in the January/February 2022 Issue of SUCCESS magazine.
Photo by lenagu/Twenty20
