In response to a question on linkedin, someone said new customer acquisition is not an issue. It's much cheaper to keep existing customers.

Good point, Jim. But acquiring new customers is not all that expensive. However, traditional approaches are ineffective and hence, very expensive. Companies need to use new approach to building trust with prospective buyers. Strong value propositions, a clear lead definition, lead nurturing, digital body language, a good handoff process, etc.

Hire a bunch of salespeople, train them in Solution Selling, etc. and turn them loose -- that's a prescription for disaster.

Read more at http://www.fearlesscompetitor.com

I agree with the comments and the question: acquisition is an important aspect of marketing. I think the problem is that some companies become too focused on acquisition, and therefore unbalanced in their customer portfolio and business operations. For example, I have seen companies with significant customer service/product issues that responded not by fixing the underlying problems, but by acquiring customers to keep filling the leaking bucket.

Even companies with fundamentally good products, service quality, and generally loyal customers will have attrition. Even if they cannot grow due to their markets, they will need to replenish lost customers.

To Jeff's point: too much acquisition has been poorly executed and unnecessarily expensive, whether it is large consumer-oriented direct mail efforts or sales management believes that they just need "more feet on the street." Winning strategies will maximize value by using all channels in an integrated manner.

One final related note: companies should give more attention to acquiring the right customers in the right way. It is easy to pump up response levels, but attracting and cultivating high-value relationships is better in the long run.

David King
http://blog.fulcrum-mktg.com

You need to work on both new and existing customers especially in today's climate. Be pro-active on existing accounts - don't just service their needs based on what you have provided them with in the past - find ways in which to increase revenue with them. Just as you don't want to continually add suppliers to your network, you are a supplier to your customer and they want to minimise expanding their supplier network so develop opportunities with them - you would be surprised how you can turn an average t/over customer into one of your top 10 ! Likewise, you still need to find the new accounts and actually by developing your existing customers, it is actually easier to find new business because you then hone in on your strengths and can pitch more effectively. Be careful of the 80/20 rule - 80% of your turnover with just 20% of your customers - if you let one down - it can have a dramatic effect on your business.

Good answer, Michelle. Thanks. I agree on a balance. But I was stunned by executives who have essentially "thrown in the towel" on new customer acquisition. An IDC study found the biggest marketing growth spend in 2009 was "demand generation," so not everyone is giving up. However, I'm shocked at how poorly understood demand generation is.