That New Customer Smell

wunderbaum - new car Spotted on the side of a bus recently: “New customers are better than old customers because they have that nice new customer smell.”


We’re told that it can cost six to seven times more to recruit a new customer than to retain a satisfied customer. With an existing customer you can leverage your established relationship and track record. By contrast, these assets need to be created from scratch with the new customer. Satisfied customers are willing to buy more of your goods or services and they tend to be less price sensitive over time. Best of all, the happier they are, the more likely they are to refer potential customers to you.

Esteban Kolsky rightly points out that to compare accurately the cost of retention versus recruitment, we need reliable data regarding customer acquisition costs and customer maintenance costs in the relevant industry.  I wonder how many law firms track these costs in any systematic way? What about tracking the costs incurred by a law firm knowledge management department to attract or retain its internal (or external) customers? Have you given any thought to the costs of maintaining and expanding your services to existing KM customers as opposed to ignoring what you’ve got and chasing new customers?

When you think in terms of developing a long-term relationship, you realize that what you need is an ongoing conversation with your customer.  It’s this conversation that helps you understand your customer’s needs and how you might best serve. It’s this conversation that allows you to grow with your customer in a perfectly symbiotic way.

Zappos has taken this even further.  The company claims that

Customer service isn’t just a department. … We’ve aligned the entire organization around one mission: to provide the best customer service possible.

Contrast this approach to the ones described by James Surowiecki when writing about the current crisis in customer service. Where does your law firm or KM department fall on the spectrum that runs from Zappos to far less attentive organizations?

I’ve heard it said that the difference between a customer and a client is repeat business.  What are you doing to ensure that customers become long-term clients?


[Photo Credit: Me Maya]

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