Fanminder Blog

We’ve all heard the maxim that “Keeping a customer is five times less expensive than finding a new one.”

The Wall Street Journal reinforced this point of view with an article today In Tough Times, Companies Coddle Their Regulars

So why does it seem like there’s so many more start-ups focusing on helping local businesses find new customers, rather than make the most of the ones they have?

It’s grossly lopsided: new yellow page competitors spring up daily. Vertical directories for restaurants and clothing stores and malls and so forth; sites to help a consumer find new shoes or the new pair of jeans in the mall ; coupon sites by the dozens; ratings and reviews; every conceivable type of online marketing tool promising to aggregate every last empty spot on the web just for your business.

Don’t get me wrong. We know that local and all types of small businesses spend in order tens of billions in advertising to attract new customers. The average small business spends $2,500 on marketing per year. Undoubtedly, this a big chunk of money and money that could be spent more efficiently with higher impact.

Yet I don’t think that’s the only answer. I think another, overlooked piece of the puzzle is that marketers looking to help small businesses, just don’t get them. It’s a lot easier to want to build some sexy consumer directory than it is to understand how the cash register is “z’ed” out at the end of the day. Or how a small business owner procrastinates entering the emails from the guestbook into excel every day (or more likely, week or month.)

At Fanminder, we recognized the untapped value in driving more repeat business – focusing on your customers and not chasing the next new one. When we visited local businesses and sat and listened to their problems, we heard how they all kept lits of their customers, but they didn’t do anything with them. Instead, they told us of how they chased prospects through all types of marketing – and how those programs don’t deliver the goods, cost too much, and as a result, they move on to the next fad.

The customer list is usually many lists, scattered around. It goes unutilized because it’s just too hard for the owner to create marketing. Outsourcing it is too expensive. So the owner defaults to conducting marketing based on which advertiser walks in the door today.

Naturally, Fanminder changes this. When an owner can sit down and in 10 seconds or less be instantly communicating with their customer, that’s a pretty big revolution vs. the same ‘ol way of marketing. And when those text messages can be tracked the program’s success measured, now you’re talking the language of the owner.