What the Kardashians can teach us about business strategy
Ok, I’ll admit it. Until recently I couldn’t tell one Kardashian from another. That’s no surprise, I’m not exactly ‘target market’. But the phenomenon of their phenomenal success got me curious. And after scrolling through endless narcissistic selfies and self-promotion on Instagram (all in the name of research of course) I came to something of a realisation. Their empire is built on one of the most basic principles of business: The customer you have is worth more than the customer you don’t. In other words, they keep their existing fans perpetually interested by providing them with an endless stream of exactly what they’ve come to expect with the brand design of Team K. They put retention above growth. Kudos to the Kards.
Why you should focus on retaining your current clients, not attracting new ones.
If you’re in business, you know at least one thing to be true for new business strategy. Attracting new customers is hard. And not just hard. It’s also time-consuming, expensive, and it inevitably takes your focus away from the work you should be doing for your existing clients.
Which raises an interesting question. If you’ve already invested the time and money to win over the customers you’ve got, doesn’t it make sense to develop the potential and seek out the value in those relationships rather than constantly seek out new ones?
If you’re not sure how to answer that, here are some figures for thought. The Pareto Principle states that 80% of sales come from just 20% of customers. And, according to Bain and Company, a 5% increase in customer retention can lead to a 75% increase in profitability. Dwell on that for a second.
Now I’m not saying those numbers ring true for every business. But hopefully, you can see how looking after and encouraging loyalty among your existing customers could lead to you never having to make a prospecting phone call again. And who doesn’t want that?
The Kardashians are savvy, and there’s no denying Kris Jenner has created a pretty powerful business strategy for her girls. As a brand agency, design agency, website design agency or marketing design agency (we don’t like to be put into a box!), we can learn a thing or two from them. For some, not all I know, there is a likeability to the Kardashian women. Perhaps wearing their heart on their sleeves a little and that feeling we know them because we see what they’re doing on social media, makes us want to buy into their brand. But how does this relate to the everyday running of a website design agency? Transparency. Understanding. Interaction with ‘fans’. Knowing what you’re ideal customer wants and playing to these strengths is so important. If they shout about how great you are, new clients come. They want to be part of that. There’s a lot to be said for looking after those who are already invested in your brand.
How do you improve retention?
The simple answer is by thinking of your relationship with your client’s as long-term and not just transactional. Find where you can add value, share what you know, take an interest in their business, reward loyalty and, if it’s appropriate, personalise your relationship.
At Sixth Story, part of the journey we go on with our clients involves empowering them. When we create a website, for instance, we’ll also provide the tools for clients to ‘seo’ the site themselves, and perhaps even some tips on using social media to drive customers there. We aren’t just a website design agency or marketing design agency for them, it’s a collaboration and a partnership.
When the website delivers an ROI, the client won’t just remember we built it, they’ll remember we helped them to make it a success. They’ll recognise the value of our expertise. Which establishes a foundation of trust for the next project that might come around. Which will be another opportunity for us to share our knowledge and add some value. And that will hopefully be the start of a beautiful relationship.
But what about growth?
It’s true that life might get pretty boring if you only ever get to work with the same few clients. But the lesson from Kardashians isn’t ‘don’t bother with new customers’, it’s ‘don’t seek them out’. And this is another way that focussing on retention pays.
The best (and cheapest) growth comes organically, as a consequence of doing what you’re already doing. When you do your absolute best for your existing clients at every possible opportunity, at the very least they’ll refer you to their friends or colleagues. At best, you might even start to gain something of a reputation in your industry. And that’s when those prospects will start calling you. You can’t underestimate the power of having good brand design. There’s a reason, for example, for her lip kits Kylie Jenner hired a team of experienced designers. We don’t want to toot our own horn too much, but we think we know what we’re doing by now to help create the best brand design possible as part of an ongoing business strategy for our clients.
Of course, this isn’t the first time we’ve spoken about some well-known faces. We also have something in common with Beyoncé don’t you know…