Taking really good care of your existing customers is probably your best strategy toward acquiring new ones, IMO.

http://sethgodin.typepad.com/seths_blog/2010/05/no-new-customers.html edit

Unfortunately, I think I spend my time and energy disproportionately on acquiring new customers, but I agree with Sean....keeping the ones we have engaged and happy is a much better investment of our time and resources. edit

That's an easy answer...they're equal...they have to be or I think your time management is wrong and ineffective. Sean hit the nail on the head when he mentioned the importance of referrals...that is actually what I take out of his comment. If you can retain your existing customers, you have a business. If you don't, you are "reinventing the wheel"...and it gets tiring and expensive.

Joe Villeneuve
joe@3venterprises.ws
http://socialmarketingeducation.blogspot.com/ edit

I def agree... Most reflect all their time and energy on gaining new customers instead of keeping the one's they have happy! edit

Yes, that's true. But in this competitive world, it's becoming more difficult to get new clients; that's where all the energy goes.. edit

Apply 80-20% rule. I spend my time as following:
40% time - existing customers producing 80% revenue
10 % time - existing customers producing 20% revenue
50 % time - prospecting, networking, and acquiring new customers edit

I agree with Sean, doing an excellent job with your current is the best way (thanks to the word of mouth) to get new customers. edit

80/20 Rule - It has worked best for 3 different businesses I have worked with. Ranging from $50K/Year revenue to $2M/Year revenue.

80% of your time should be spent on your top 20% of your current customers.
20% of your time should be spent on gaining new customers and maintaining 80% of your non-top customers.

The statement sounds confusing but it is accurate. Good Luck! edit

I'll answer that question with a question. Which group, your present customer or potential customers can satisfy the following: Give you referrals. Provide you with 80% of your income. Can be easily sold to. Drum roll please... Your present customers. It's a fact of life, that if someone has purchased from you and they are satisfied with your product and service, that if you ask them, they will be more open to giving you a referral than someone who doesn't even know you because they are simply a POTENTIAL customer. It's a fact of life, that if you study your sources of income, that you'll probably see that somewhere around 20% of your best customers are bringing in 80% of your profit, which a POTENTIAL customer can't do, because they haven't purchased from you yet. Finally, in order to build repeat business, a customer has to build up trust in your company over time, which again, a POTENTIAL customer can not do since they have no experiences with your company.
Now, do you see why it's not just important but imperative that you spend the majority of your time taking care of the people who bring you the most profit, refer you to new business and come back time and again?
Do I think you shouldn't devote any time to acquiring new business? No, but I do believe a good majority of your effort looking for new business should be spent obtaining business from your current customers.
One last thought; a bird in the hand is worth 2 in the bush. edit

My company is in aerospace. As you can imagine, the competition is stiff for a limited pool of customers--there just aren't that many companies building things that fly anymore. As a result, we woo our customers every way we can think of. The thing that works best, however, is great service and reliable products. At the end of the day, they'd rather know their planes (made of our parts) will carry people safely than get a case of wine from us at the holidays. We may be an extreme example, but I think the basics of product/service excellence still apply to all businesses. edit

Like everything else in business, "it depends." It most depends on the industry you're in and timing of your business cycle. If you're in a niche market, then obviously you want to focus on keeping your circle of customers happy, but as you grow to become more versatile, then you need to focus on improving your customer base. I could "what if" this all day, but I think you get my point. edit

Generally, I would think that 80% new clients/ 20% current client retention, is the ratio that I have operated under in different organizations. Although, it seems there are a lot of small and medium sized companies today that do not try to reach the 20% number for the retention of current their clients(who could also purchase other products and services). And that really surprises me due to the cost of new client acquisition vs. maintaining an existent relationship with a client(depending on the industry). edit

For right now all the energy and time spent on getting new clients. Although i agree with Sean! edit

As a new business (really new) I definitely spend more time on finding new clients. But, I also give those in the fold a good amount of attention. Remember to never forget what you already have. edit

Client retention is of utmost importance to me. As a personal fitness trainer, my clients are my main advertising which leads to new clients. edit

I totally concentrate on servicing my clients - I am constantly reassessing their business needs and training, introducing them to those business modalities that they are ready for - creates lots of interest, shows versatility and the new clients come from my current ones edit

I totally concentrate on existing clients. If i provides best solution & services toexisting clients, with the help of these clients i generate a new clients. Because i think mouth publicity is the best promotion & Marketing of every business.

Regards
Vincent edit

i spend more time on finding new customers. The type of business I'm in requires you to follow-up with new customers for a few months, from time to time communicated about new products and/or services and see if they have any needs are concerns. In the meantime, I look for new customers. edit

I am currently servicing clients in a moble hair style business .Clients are in assisted living , nursing home facilities....as well as children hospitals ... the need is great ...the performance and customer service is vital. edit

Karen,

I couldn't agree with you more. What I think is really great about your business is that it not only fills a need, but a want. The want part is your customers have someone who comes to see them on a regular basis at a time in their lives when it often seems to them that no one cares. They want someone to care about them, and you do that as well as make them feel good about themselves. After all, what is the best customer service but making sure your customers are happy? And you do that in spades. Kudos to you Karen! edit

You can expand through your current client base.
I'm banking my time on the foundation. edit

Mark, I bet your foundation is strong! Thanks for your input. edit

Is a common principle, nothing last with maintenance. Is good for every business person to have a good relationship with their customers in order to keep them coming. Your business will always be on their lips simple like ABC when you treat them good but that doesn't mean all the adverts we seen on television are meant for existing customers. Is always important to keep searching for more and that's business expansion. edit