Get Every New Customer You Can

Most companies prioritize new customers. Getting a new customer costs more than it does to retain an old customer. That is why many sales teams and sales researches have long argued that businesses need to change their mindset and understand that you get most of your sales from loyal customers.

It’s something argued so frequently that businesses are now diverting more and more resources to current customers, looking to maintain their business, upsell, and more. Based on research into generating revenue, this may not be a mistake. But some businesses have gone a bit too far – they start to look at new customers as being of lesser importance compared to new customers.

This could not be further from the truth. New customers absolutely have to be not only appreciated, but prioritized, specifically for the very reason that so many businesses seem to ignore them.

What Does it Mean that New Customer “Costs More?”

New customers do cost more. You invest in marketing. You invest in sales. You invest in reputation management. You invest in advertisements, time, and so much more, all to get just one sale from an incoming customer.

The ROI of that is low. Some businesses actually lose money. But that doesn’t mean that a new customer is less important. That means that a new customer is INCREDIBLY important – because you just spent a considerable amount of money to obtain them, and if you cannot convert that customer into a loyal customer, all of that investment is for nothing.

There’s a story of this amazing dentist that describes this in greater detail:

This dentist’s goal was to increase profitability. New patients cost a lot, not just to obtain but also to handle the insurance issues. New patients also tend to get less work done, as they do not know the dentist and will almost always come in for a cleaning and assessment – the two least profitable procedures.

So the dentist filled their schedule with almost exclusively returning patients in order to maximize their profitability, and then left a small amount of space open for new patients. Not surprisingly, the dentist would occasionally get calls from potential new patients that could not find time on the schedule, and they would choose to see a different dentist.

We discussed this, and I explained to this dentist that that was a huge mistake.

First, like most businesses, they invested heavily into marketing to new patients. Whenever a new patient calls, that’s their opportunity to see a return on their investment. If they let the new patient go, the money they used to obtain that new patient goes with it.

This is especially true in dentistry, because a patient only sees a dentist a few times a year, and once they’ve chosen a dentist they can stay with that dentist for 2, 5, maybe even 10 years or more. The chance of making them a patient in the future is almost nothing.

In addition, new patients are also more likely to have untreated dental issues that may be more profitable. They may not choose to address them right away, but their long term profitability is strong.

Dentistry, of course, is not the only industry like this. In fact, it could be argued that all businesses benefit the same from new customers. Losing out on new customers just because existing patients are more profitable is a misunderstanding of what we know about their ROI.

Summary: Get New Customers When You Can

Yes, it costs more to get a new customer, and it makes sense to prioritize investing in current customers. You may even find that you profit even further if you divert a plurality of your investments to improving existing customer conversions.

But if you have an OPPORTUNITY to get a new customer, you have to take it, even at the expense of a loss in current profitability. It costs a lot to get each new customer. You can’t afford to lose out on the ones that you can get.