You may have heard the phrase by Philip Kotler, a best-seller in Marketing and BI : “Keeping a customer costs 5 to 7 times less than acquiring a new one”. Therefore, we can conclude that selling more to someone who is already our customer is easier than selling to a new customer.
But have you ever thought about why this happens? This is the topic we will address in this post, follow along and stay up to date on the subject!
AUTOmanada effect
Behavioral economics is based on the premise that we gmx email list have two ways of thinking — one fast and one slow (according to Daniel Kahneman) or intuitive-automatic and reflective-rational (according to Richard Thaler).
It turns out that, generally, our brain is lazy and seeks to use the quick (intuitive-automatic) way to make decisions, often this works and saves us energy.
If we have already used slow (reflective-rational) thinking to make a decision and we think that "we are amazing at making decisions", this must be the best and most well-founded decision, which is why we should repeat it or maintain it. This is also the anchoring effect , this first decision anchors the next ones.
In other words, if at some point I used my brain to decide whether or not to buy from a company, I have already decided that it is good, so I can buy more or buy again. This is the AUTOmanada effect .
Therefore, in addition to investing in campaigns to bring new customers to your company, be sure to invest in campaigns to retain customers and sell more to them. This will increase your LTV (lifetime value) , which ends up being the best way to increase your profit, since in the first transaction of a customer, you will still have to recover the investment you made to make that sale.
How can I adopt this model in my company?
This practice can be done with specific ad campaigns, but mainly through automated email relationship rules segmented by profile and engagement .
It's no wonder that institutional Google Ads campaigns (campaigns where you buy your brand's keyword) always have the best return on investment . After all, if someone searched for your brand, they already know who you are and are more likely to buy from your store.
Therefore, a great way to understand whether your digital marketing strategy is successful is to look at your Google Ads campaign . If performance is improving month after month, it means that your current customers are increasingly buying from you.