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The Real ROI of Engagement

Loyalty means business

We are bombarded by “feel good” social media advice. Join the conversation. Engage. Listen.

But this stuff takes time and effort. Where is the return on investment?

It’s not just about chatting, and the ROI is not found by simply throwing up a Facebook page.

If you are struggling to convince your boss (or yourself) that the effort of engaging your customers and prospects is worth it, the two headline reasons you should work on engagement are:

1) If you lose as many visitors as you attract then you are making your marketing twice as difficult.


2) It’s harder and more expensive to attract new customers than it is to keep existing customers happy. 

“According to the Customer Service Institute, 65% of a company’s business comes from existing customers, and it costs five times as much to attract a new customer.”

Beyond dollars and ROI

Rather than just think about money spent versus money generated, think about how relationships and engagement moves your business forward (or site, blog, mission, etc). I am sure you realise the benefits of talking on the telephone with customers goes way beyond the cost of the call and your time to make it, so let’s hold email and social media to the same standard, eh?

Fact is, there are many real business reasons why you should work on relationships with your audience and especially your customers. The rewards go beyond having people feel warm and fuzzy towards you, and everyone should be aware of these rewards.

The biggest reason for me?

Sonia Simone of Copyblogger jokes that she is the world’s worst salesperson because she could not sell raffle tickets to her Grandma. I joke that I am even worse than that because I wouldn’t even try.

By keeping my audience and customers happy I don’t have to sell anywhere near as much.

Many people focus on the technological aspects of CRM (“Customer Relationship Management”), and to be fair I did spend a lot of time with technology when working with clients large and small, but as with most of these kinds of things, people are more important. You can do a lot with simple spreadsheets.

Read on to find out how this works.

1. Understand your market

It starts with understanding your customers so you can work out what makes them tick.

  • Listen to people in social media
  • Talk to prospects
  • Especially talk to customers
  • Keep in touch with prospects and customers
  • Make it easy for prospects and customers to keep in touch with you over time

The more you can empathise with your target market, and identify the people within that market that you can most help, the easier it is to reach those people and communicate with them.

Yes, if you have the budget, you can still blanket the general population with your messages, but it is far better to talk to the specific people who will be receptive to your solutions with the precise outcomes that they are looking for in the language they understand.

By talking with your prospects and clients today you can find out what your future clients are looking for, how the market is evolving, and where they want to go next.

2. Stop the leaks

Your whole funnel will have leaks.

Ted Kolovos has made a specialty of looking at a customer’s business and optimising it, and one of the key ways he does this is look for ways you are leaking profit. In a conversation we agreed one of the main ways that businesses lose profit is through prioritising attraction over retention.

As mentioned earlier, it is harder to attract new people than keep existing people happy, but it goes beyond that.

There is a good reason that people who joined my list several years ago might take action and buy something today. I want to know those reasons both in favour and against!

  • Consider how many times you have been convinced to sign up to a newsletter, but the content afterwards does not live up to the promises?
  • Count the many companies you come across who incentivise new customers but neglect existing ones, even to the point of not allowing existing customers to get the best deals?
  • How is your behaviour triggering behaviour in your customers and prospects?

I often say common sense is seldom common practice, and this is one of those times.

Look at your data. Talk to your people.

  • On which auto responder message do most people drop out?
  • Where do most of your quality leads come from?
  • Where do your poor leads come from?
  • Which messages get people taking action?

3. Nurture customers into long term customers

It’s not just your lead funnel but your existing customer list that requires nurturing and monitoring.

Of course I get many one-off clients, and that is a given. That said, I have customers that date back to when I first started my business. My customers often turn into friends through these extended relationships.

Return customers are both much more profitable but more enjoyable too! My favourite part of my business is helping people. If I never had to sell anything again and just do helpful articles, forums, emails, webinars, coaching and Q&As I would be a very happy man.

4. Attract your best new customers more easily

I have spent a great deal of my career elbow-deep in marketing databases and CRM systems. All that data supports the fact that your best customers are not necessarily the ones who buy your most expensive stuff.

Does that surprise you?

There are two other factors:

  1. How recently did they interact or transact with you?
  2. How often do they take actions with you?

Someone who bought your highest ticket product a year ago might be less loyal than someone who bought three moderately priced products over the same period.

Think about it, how loyal are you to the company you bought your last bed from? Now think about things like your Netflix subscription, newsletter subscription, memberships?

Your best customers will have attributes in common, similar behaviour, and they might have been referred from similar places. Find out.

5. Understand, communicate, rinse, repeat

It’s not about data, it’s about understanding your business and not leaving things to random chance.

Find out WHY they join your list, why they leave, why they do or do not buy something , and why or why not they buy something else. Score your customer database to find your very best customers and do your best to understand them so you can clone them.

Obviously you will want data plus the experience of working with these folks, but it starts with your data.

Bottom Line

OK, you could be happy selling your ebook to one-time buyers over and over, but I think it is much more fun and profitable to have a collection of solutions and options so you can help more people in the ways that make sense to your best customers.

As well as making more money, finding ways to up and cross-sell to your existing customers can help you build a much more solid and more enjoyable business.

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  1. This was a strong one, Chris. Especially the points about leaks and retaining versus attracting. Boy those terms sound a bit sterile, don’t they? But they make total sense and I’m glad to be reminded of the importance of paying enough attention to those who have already chosen to do business with you.

    Off to my Evernote with this one!

    • I will have to do a follow-up on this if people are interested in the subject, there is a lot more to it. It does start with “paying attention”, as you say though. Sounds obvious but we get onto the treadmill of traffic-sales-traffic-sales unless we are careful and take a step back!

  2. Finding new customers is expensive, but I’m learning that nurturing current customers is expensive, too.

    I did a promotion, and found myself dealing with a lot more engagement in the form of questions and asking for discounts than I planned. Then, I found myself dealing with CUSTOMER questions and random emails once the promotion was done.

    According to Mailchimp, “after about 4 months, your average click rate for your average email subscriber drops to less than 1%”

    No matter what you do, who you are, engagement is hard!

    • I hear you Hashim.

      In fact I made myself too available over the years, sometimes to my detriment, but fortunately I get a kick out of helping people so it has its own reward for me. Knowing what might happen helps you formulate your plans for next time around also 🙂

      This is one of the reasons why as a one person operation I have to limit the number of spots in my courses, etc.

  3. You are so right, Chris, and it is surprising how few business people apear to have grasped that every customer/client is a person, with a set of personal preferences, one of which is not to be mistaken for a wallet on legs.

    Yesterday, I applied for a freelance job as editor and re-writer of e-books designed to be used as marketing material and was turned down because the employer, mistakenly, believed my only experience to have been in the world of reference works and novels.

    The explanation for rejecting my services was that my experience is not suitable as they are into ‘marketing’… as though material designed for that purpose were not a mixture of fact and fiction in 99% of cases!

    Perhaps I should have returned to them with a list of the marketing materials I have produced and helped to produce but it is not for me to educate people on how to approach their customers. I leave that to you and I see you are doing a fine job here 🙂

    • It’s often difficult to know when to step away and when to continue talking. Most of the time I am too timid – I know I have lost opportunities because people expected me to push back or speak up!

      (Funnily enough, myself and my wife have the same problem – we were brought together by friends because neither of us would make first step!)

      Sometimes though it is obvious there is going to be a communication issue which can save you woes down the line. Culture fit and common values is surprisingly important 🙂

  4. Ted Kolovos says:

    Chris, thanks for the mention!

    I liked what you said about nurturing customers into long term customers. My dad has run a successful pizza restaurant for over 35 years by following that tenet alone. In all that time, he spent very little money on advertising and instead interacts with his customers so they come back again and again – plus they refer friends. Some of his customers have been eating there since the 1970’s 🙂

  5. Thanks for the great article Chris. I also downloaded both your free ebooks and use the CREATING KILLER FLAGSHIP CONTENT” a lot. You are the only blogger that I read who consistently hits the nail on the head. If I can ever get my stuff together, it will be because of some of the things you’ve said. Would love to join one of your classes but right now, impossible. Most of my problem is time but there also is a lack of funds.

  6. Great article! Found quite a couple of key points mentioned that is really viable information. Thanks for a great read.

  7. Think its nice to see somebody talking about seeing the people behind business rather than just focusing on money aspect. In my experience I would much prefer to deal with the same customer time and again because they have had good service, rather than new customers who have no loyalty. It would be nice for some of the bigger corporations to get this sort of attitude!

    – David

  8. Spot on Chris. I focus almost all my attention on the care and feeding of those already doing business with me, and I allow attracting new customers to come through word of mouth and from those who hear/see me at speaking engagements. The effort I put in this year will be to deepen the share of wallet those already working with me spend by creating things that these clients can put into immediate use to increase their ROI, thus increasing mine.

  9. I was mulling over the gems in this post long after I finished reading it, Chris. It dawns on me that many of us (ok, maybe just me) are addicted to newness, shiny bits and intensity these days. We like the idea of “attracting” and put our energy there, and get “bored” with the idea of “relationship maintenance.” In truth, as you say here, it does take more energy to attract the new — and I think why many hang out in that realm despite that is that egos get swept up in the “yippee, look how I just attracted more new (followers, customers, etc.)” and skate on the surface of new relationships (mistakenly) thinking it’s “easier”. But I’ve learn a lot from watching you through the years — I’ve learned that my loyalty to you and what you offer has to do with you taking the time to understand me / your audience and provide us with the answers to the questions that “keep us up at night.” That takes more focused attention, more discipline, more “other focus”, and more listening. But the return on the investment is so much greater.
    Anyway, I’ve rambled enough. Suffice it to say, “thanks” for another brilliant installment. I’m off to go write a post to my own audience and carry your message forward. Cheers, Erica

  10. Chris,
    Thanks for the great article. I think that one of the hardest parts for the new blogger, no matter how good their content is, is to get people to trust them. One of the biggest mistakes I see people make is trying to sell a solution rather then suggest ways to solve their problem. I look forward to reading more of your posts.

  11. Chris I’ve heard some pretty bad stories about businesses using daily deal sites to attract new customers by offering huge discounts, only to see it backfire because their existing clients didn’t get the same deal (because they didn’t know).

    I think over time a lot of companies get complacent and forget how hard it is to attract new business. All the more reason to focus on keeping what you already have!

  12. Hi Chris, I really enjoy your articles, very little fluff, just real practical advice that works. How refreshing!

    I absolutely agree with you that keeping existing customers happy and in the funnel is a much better tactic then trying to find new ones. The fact that they have bought once is a good indication that they will buy again, as long as you keep the relationship going and continue to offer them relevant material that improves the quality of their life. I know when I find a business that understands what I am trying to accomplish and has good customer service, I don’t look anywhere else and will often look for other things they can help me solve.