Perpetual motion, like the alchemist’s stone, makes a great legend. The idea of something that keeps going indefinitely with no external source of energy is highly seductive, but also highly impractical. Friction or resistance of some kind will always intervene to eventually bring the system to a halt. However, almost-perpetual motion that just needs a teeny bit of energy to keep going is a much more realistic proposition. This is the big difference between new sales and loyalty sales for a company, where sales costs can diminish in favour of the repeat customer by a factor of up to 10. What is the secret sauce that lets companies strengthen their sales and their business continuity by so much, and for so little?
The starting point is customer satisfaction. When customers are satisfied, their natural reflex is to consider their current supplier when they want more. There is a caveat however. Satisfaction doesn’t yet equate to loyalty. A satisfied customer may still turn to other suppliers, in order to keep prices and service keen. Likewise, a dissatisfied customer may continue to buy from the same supplier, if no reasonable alternative is available. However, in this case, it’s difficult to speak of loyalty, because real customer loyalty is a matter of choice, not of obligation. So customer satisfaction is a necessary but not a sufficient condition for loyalty. What’s the next ingredient?
Building a solid relationship with customers as well as ensuring their satisfaction gets you to the next level. This is where customers start to speak positively of you, your company and your offering to their own circle of acquaintances. Word of mouth marketing like this is one of the most effective ways to attract additional sales. Not only do the sincere recommendations of current customers to others have significant weight, but the marginal sales costs to your company are zero. This brings us back to our almost-perpetual motion machine, now powered by well-managed sales relationships, and customer loyalty and satisfaction – a small outlay financially, compared to the kind of advertising campaigns and marketing promotions needed to find those new customers all by yourself.