In the long run, every business must grow in revenue to survive. Let’s imagine two Travel businesses: A and B. Business A says, “I will grow in revenue by acquiring new clients, simple”. While, Business B believes in providing more value to existing clients. The clients, in turn, reward Business B by allowing it to upsell/ cross-sell them and even provide few referrals. If both, A and B, end up generating equal revenue, which one had a better approach, according to you? And, why? (Please share your thoughts in comments.)
1. Success of any business can be estimated by their product and service. While, Business B focuses on these, Business A focuses on sales and marketing and advertising. As a result, A is unable to create a Human Chain Reaction, essential for building any sustainable and scalable business.
2. Marketing and Advertising is a lot of hard work. Shouldn’t we all do things we are the best at? If a person is not a good marketer, but, is the best at providing a certain travel experience, shouldn’t (s)he do that instead of spending energy on raw leads?
3. No point filling up a bucket with holes. Acquiring new clients maybe the fastest way to grow. But, in the long run, is it sustainable? If your clients are not doing repeat business with you, should you try and understand their problems or be looking for new clients, instead? As they say, fix the holes in your bucket before keeping it under a stream.
4. Acquiring a new client is 5 times as expensive as retaining an existing client. Many businesses fail to realise the value of their clients until it’s too late. Here’s a detailed infographic from Invesp Consulting.