• by Chad Little , December 15, 2009

I have always found the directions on my shampoo bottle to be humorous.

Wash, rinse, repeat.

I guess I was amused for a few reasons. First, the fact that directions were necessary at all is funny. And now I think about the fact that someone in the marketing department of a company producing shampoo years ago had a moment of brilliance and realized that if you instruct people to use the product twice during each use, sales were bound to increase. And I'm sure they did!

In a similar way, I'm continually amazed at the amount of time, energy and dollars companies spend to attract the next new customer. The new person they don't know. The amount of dollars spent attracting the new consumer dwarfs the dollars spent keeping the ones they've got. I know this is how marketing has functioned for years, but with all the tools and innovations that have since emerged, it's time to diversify a bit. New customers shouldn't get all of your attention -- there are quite a few benefits (for both you and to consumers) when you begin to focus on existing customers.

• One purchase ... is just that The prevailing mentality in online marketing is that once someone has made a purchase or completed a lead form on a Web site is that the job of the marketer is done -- when it's really just the beginning of the hard work. The online marketplace is ten times more competitive than the offline world where comparison shopping is just a click away. Marketers should shift their effort to now forming a relationship with that customer. Offline marketers would kill to have the capability to only target existing customers in a way that builds relationships. There is a reason for that -- it's effective.

• Talk about low hanging fruit The cost of attracting a new customer is far greater than getting a sale from an existing one. These are in-market leads; you have their contact information, so the next step is to get them back. Staying in front of them with an ad or email is highly effective, making a return conversion one of the most cost effective conversions you can have.

• Nothing beats a referral Simply asking a customer if they were satisfied with their experience is irrelevant, while getting a customer to refer you to someone else is gold ... so ask a customer for a referral once they have purchased. You'll most likely learn some valuable insight into your business, customer service, and overall experience based on their response. This allows you to make your Web site more shopable in the future. Plus, once you get the referral, the word of mouth advertising is priceless.

• Higher return visits typically means better customer service The more you focus on increasing customer retention, you'll find yourself focusing more about the customer experience as a whole, and how you can improve it. This is true for all businesses; from the online retailer to the service provider. Sometimes knowing that your end goal is to increase repeat purchases, you'll find that you will place more focus on customer service -- which is a good thing. Keep in mind that Customer Service is not a cost center. It's part of the marketing budget and is integral in customer retention and customer referrals.

Focusing on increasing customer retention is not an easy task. It takes time, research, resources, and typically quite a few conversations internally to get a plan or solution in place. How much of your marketing initiatives are focused on driving the next new customer? How about time focused on increasing your conversion rates from search marketing? Time spent finding the next new source of traffic that hits your metric goals? If it hovers around the average 80% mark, do you think you can drop that to 50%? Even less than that at 30% or 40%? Give it some thought -- there are definitely benefits to shifting resources to focus on client retention verses continuing "Shampoo Marketing" efforts.