The Best Way to Obtain a New Customer

… is to keep an existing customer.

What are companies doing wrong?

Much effort goes in to gaining new customers. Marketing departments spend a small fortune on advertising, generating new leads and increasing market share by enticing customers away from the competition. Effective as these strategies can be, there is often a better way to win customers: to retain old ones rather than recruiting new ones.

See the Problem

Have you ever dealt with a company where:

  • Calls to the sales line are free. Calls to the support line are charged.
  • Calls to the sales team are answered immediately. When you call the support line you are put in a queue (but a recorded message assures you that your call is important to the company).
  • New customers are drawn in by special offers and discounts. The price goes up for existing customers.
  • New prospects get personal treatment. Existing supporters get junk mail, web portals and call centres.
  • New customers can buy the product. Existing owners can’t get parts to maintain the product.
  • New clients get the red carpet treatment. Existing clients get a kick in the teeth.

Sadly, these behaviours are very common. We see them in banks, utility companies and even in some churches.

Follow the Feeling

As a customer of a company like this, how does this make you feel?

Deep down, we all know that company behaviour is a reflection of company values. And companies that behave like this don’t value their existing customers.
As a customer of a company like this, what do you do?

  • We tell our friends about or bad experience.
  • We take our custom elsewhere.
  • We don’t come back (unless it is even worse elsewhere!)

Look for the Danger Signs

It is as if your front door is a revolving door. Customers come in, stay but a little while, and then leave. If your company has a high “churn rate” (i.e. customers leaving and going elsewhere) then you have a problem.

What is The Alternative?

Look after your existing customers.

After all:

Existing Customers Spend More

You already have a relationship with your existing customers. They have already shown an interest in your product, your company and you. They have already been sufficiently impressed with your products to part with their time and money to enjoy them. They have said “yes” to you once, so (all things being equal) they are likely to do so again.

(To find out why, see Cialdini’s chapter on Commitment and Consistency in his book, Influence).

You Already Know Them

You already have data about existing customers. You should already know:

  1. You know the types of products that they choose.
  2. You already know their names, addresses, contact details etc.
  3. You know what sales techniques work on them.

If you’ve reached them once, you can do so again.

Existing Customers Cost Less

It costs 6-7 times more to acquire a new customer than to keep one that you’ve already got.

Existing Customers Recruit New Customers

Happy customers tell other people about their experiences. They do your marketing for you.
(To find out why, see Cialdini’s chapter on Social Proof in his book, Influence).


Some of my existing customers are problem customers. Are you saying that I should do everything I can to retain them?

No. I’m talking here about your current good customers. Although some of your problem customers become less of a pain if you treat them better, you should really think carefully about the value of retaining customers who are a drain on your resources without helping you achieve your goals.

I need new customers if my business is going to grow. But you’re saying that I shouldn’t go looking for them?

No, I’m not saying that! I’m saying that your focus should be on looking after your existing customers because there is generally a better return on investment in doing so.

I sell low quality products, so most of my previous customers don’t want to come back.

Then, sell better products!

I sell high quality products, so most of my previous customers don’t need to come back.

So, either sell them something else (accessories, complementary products, enhancements, support contracts…) or, recruit them as ambassadors for your company. Or both.


It is difficult to over-state the importance of looking after existing customers. They are your bread and butter. Look after them and they’ll look after you.


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