Does EVERY company need new customer acquisition?
I started my first start-up, Film.de, in 1996. There was no question about it: it was really only a question of how we could get as many customers as quickly as possible. In my digital agency since 1997, of course, we also had to win many customers first. This was also very successful in both cases, so that we grew to over 50 employees. Of course, at some point you ask yourself whether it's really always necessary to acquire new customers and whether the huge effort is justified.
Especially in an agency, regardless of whether it works digitally or covers an offline area such as print media or events, the pitch effort is huge. Usually, 5-10 agencies are approached first. A pitch is then organised with a shortlist of 3-4 agencies. You're glad that you've made it to this round. Then you have to prepare elaborate presentations. This takes at least several days, sometimes even weeks - and all without payment or only for a low lump sum that doesn't cover the effort by far. If you are lucky (and you always are), you win. If you are very unlucky, you come second. A lot of effort, no return. That is economic madness. Consequently, you try everything to make your existing customers happy. That's what everyone tries to do in all sectors. So if it works well, you don't need to acquire new customers any more? A mistake that can have devastating consequences.
I see four reasons why really EVERY business needs new customer acquisition all the time.
- Company launch
Whether you are a startup or a "normal" company, you need customers at the beginning. Of course, the product has to be developed first, the store opened or the online store built. Immediately after that, nothing works without customers. First, the business model has to be tested by real customers. And then the real business life starts. In this phase, acquiring enough customers to be able to pay rent and salaries from them for the time being is existential. This continues as many companies need a certain minimum size to survive in the market. As SEO Agency with fewer than 15 employees, you are hardly taken seriously. For some customers, it has to be 100 employees, even if the actual job only requires three.
Nearly everyone strives for growth, personally and economically. For some business models, growth is critical because they scale. This means that each additional customer has less and less proportionate cost and therefore generates more profit. Software companies, for example, once the product is up and running, have little cost for each additional customer. In extreme cases, the new revenue goes straight to the bottom line. Who wouldn't be tempted to do a lot to add more customers? But even in many down-to-earth businesses, the entrepreneur's goal is to grow and thereby generate more profit. In addition, the employees in the company also want to develop further. The trainee wants to be taken on, the employee strives for the department manager job and the executive employee also wants to have a nice salary increase from time to time. This can only work if you regularly part with employees (consulting companies like to work according to this slanted model) or if you invest in lead generation, grow and thus also open up new opportunities for employees.
Not only employees leave the company from time to time, but also customers. This can have many causes. At the smaller store, customers move away from the neighborhood or simply die. With larger companies, there may be a new contact person who brings her old service providers with her. There, no matter how good you've been, you can't blame her for kicking you out. Some companies are very loyal and interested in long-term relationships. But there are also companies that think it's good to look for "new blood" every two years or to make frequent changes. Website relaunch perform. Both methods can be successful. The first way is clearly more appealing to me.
4. avoidance of dependencies
In the agency world, it happens time and again that a major client asks for a lot of capacity. This is great for the entrepreneur in the short term. No effort to acquire new clients and always have to deal with the same, hopefully sympathetic people. In the medium term, it can be disastrous. Let's say the major client is responsible for 50% of the agency's turnover - which often happens. It's not uncommon in other sectors either, for example with automotive suppliers. And then that client bails out, for whatever reason. As a rule, this means that you have to lay off at least a third of your staff from one day to the next, if you are lucky enough to be able to compensate for at least part of it with new clients. Terrible. Mainly because of all the personal fates. But also economically. An enormous amount of knowledge is lost, and as an entrepreneur you can't usually dismiss employees as quickly as the client. This means that there is a huge loss on top of everything else. A horror scenario. To avoid it, there is only one alternative. Always ensure a steady stream of new client enquiries. Even if you turn down one or the other, you remain flexible in case a major client drops out.
In short: Every entrepreneur, really every entrepreneur, is dependent on permanently acquiring new customers.
The trust building blocks are the perfect way to ensure steady new client enquiries. I have noticed this time and again with many clients. What could be better than when a client tells you a year after a complete website overhaul that they are not only at full capacity, but even have to turn down new clients? This has happened to me many times.
For my digital agency, too, the consequence was that we were able to decide to no longer participate in pitches. We were able to concentrate fully on the new clients who approached us directly. An enormously relaxing situation that I can only wish every company in this or a similar way.