new customer vs. existing customer

I read a very interesting article on building a product that a customer uses daily vs. occasionally. Every once in a while a product comes by and becomes a daily habit of millions – like Google, like Twitter and many others with the same intention don’t make the cut. The visitor is curious in the beginning, interest wanes for sometime, it comes back or is sometimes just gone – most social networking sites suffer from this syndrome.

However, there are a lot of interesting questions that one can answer based on new vs. existing customers:

Acquisition costs?

There are definite marketing and operational costs associated with acquiring new customers vs. increasing mindshare with existing customers. You have to do a waterfall process of reach out, knowledge creation, pass the usefulness and trust test and of course, finally delivery, All this requires effort and is easily accomplished in the case of existing customers, because many portions of the process need not be covered, only reinforcement is required.

Keeping a customer beyond utility?

However, sometimes an existing customer just loses utility and is just occupying bandwidth or mindshare of your customer service reps, It is time to take a call on keeping existing vs. fishing for new ones or re-segmenting the market and re-positioning your product to address the right customer segment.

Annuity based businesses – Schools?

There are businesses which have daily use for a period of time and they remain a time-bound essential utility, like schools, in a person’s life. It is in serviing each batch of students in the most effective manner that they gain reputation, build a brand and serve several generations of families. Maybe, in the long term every product is a time-bound utility (essentialness is questionable assumption to make, so I shall refrain), just the time-frame is sometimes visible and sometimes too far out!

However, depending on the nature of the service, ease of reachout and cost of maintaining existing customers with newer or interesting features, a business may decide that it is easier to address few needs of new customers every once or so and it works for some and not so for others. Of course, should not be a deterrent for launching a new idea with potential.


1 Response to “new customer vs. existing customer”

  1. 1 hadware May 28, 2013 at 6:09 am

    Hi, after reading this amazing paragraph i am as well cheerful to share my know-how
    here with colleagues.

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