When you acquire a customer, you get something else – you get the opportunity to make them a lifetime customer. What is the value of that? What do you have to do to keep them buying your brand? It’s an opportunity, not a given. In fact it’s more of a challenge! Before they bought your brand, you could not lose them because you never had them in the first place. Once you have them, that’s when you can lose them, and when you lose with them you lose their potential lifetime purchases as well.
This is why, when it comes to your product, think twice about giving in to the accounting argument that says, “We can cut our production costs and make more money! Let’s just cheapen our package and product slightly, and sales will continue to grow and nobody will notice!” They will notice! Especially your older and more established, loyal customers, the ones that are advocates for your brand. They will not only notice, but they will stop broadcasting about your brand to friends, neighbors, colleagues, and family. Why? They think it’s been cheapened somehow and they no longer feel right about turning their friends on to it. It’s like your brand let them down. It’s not what it used to be. It’s sort of lost its authenticity. They feel betrayed.
Sure, you may have saved a few bucks on cheaper packaging, supplies, or standardization, but you now have to put those same bucks and more right back into advertising because you lost some important advocates. That’s why we tell our clients to look at quality as an investment in the lifetime value of your customer.
Here are 5 significant contributions lifetime customers can give to your brand:
- Personal Testimonials. Firsthand accounts by brand users about the quality and value of your brand has more impact on potential brand users than commercial advertising. The prospect knows and trusts the person advocating the brand.
- Word of Mouth. Passing the word about a great find is part of the discovery process. Your happy customers want to spread the word.
- Repeat Purchases. When customers are happy, they can avoid the anxiety of shopping for a new brand by continuing to buy yours. They now depend on your brand and will continue to purchase it until, the price goes up or the quality goes down.
- Jump Start Sales of New Offerings or Line Extensions. Once they have decided that your brand is great, they want to know what else you have to offer. They will be the early adaptors to help you get sales off the ground when you come out with a new product.
- Take Ownership of Your Brand. We have often said you don’t own your brand, your customers do! They make it their brand and even refer to it as such. Competitors will have a difficult time of dislodging them from their allegiance.
This is simply customer loyalty, you may say. But this is much more than loyalty. This is advertising, brand building, credibility, stickiness and future income all rolled into one!
Resist the urge to save a dime and lose a dollar. Get and keep your customers with consistent quality, authenticity, and service and you will reap their lifetime value. It’s not what they spend on your brand – it’s what they can spend on your brand over a lifetime! It’s well worth the investment in quality and service to build and maintain that priceless annuity.
Who Are We.
Having built and sold a bestselling national brand, we appreciate the value of brands and everything it takes to make them successful. Companies are valued by their brand equity. Achieving and maximizing brand equity requires tremendous respect for all your customers, from your wholesaler to your end user.
Starting in our laundry room with no money and no knowledge of the industry, we built the famous Barefoot Wine brand. We learned a lot they don’t teach in school and much of it the hard way. Although our success was in consumer products, our real world experience will be helpful to anyone looking for information and advice about brands.
We have written the New York Times Bestselling Business Book, The Barefoot Spirit: How Hardship, Hustle and Heart Built America’s #1 Wine Brand, which chronicles the history of the famous brand from its inception through its acquisition. Our book is now required reading in schools of entrepreneurship across the country. We hope this book will provide inspiration and encouragement for all those contemplating starting a brand or wanting to improve their existing brand.
Michael Houlihan and Bonnie Harvey
-Barefoot Wine Founders