As much as 70–80 percent of the average company’s revenue comes from existing customers, according to analysts.
Yet, the majority of sales and marketing leaders (nearly 60 percent) see no need to differentiate their messaging approach between customer acquisition and customer expansion. And more than half believe the same provocative messages they use when communicating with new prospects are still applicable in a renewal scenario.
But our research proves otherwise.
The buying psychology between prospects and customers is entirely different
There’s a 180 degree difference between what motivates your prospects versus your existing customers to buy. And it’s all because of a psychological concept called Status Quo Bias.
Over the years, psychological studies have shown that when faced with a decision, most people tend to stick with their status quo. People have an inherent aversion to doing something different than what they’re doing today.
How you manage your buyer’s Status Quo Bias changes with the situation at hand.
In a customer acquisition conversation, you need to tell a powerful, disruptive story that shows them how their current situation is unsafe and unsustainable. By not changing, they’re putting themselves at greater risk of not achieving their objectives.
In a customer expansion conversation, you need to take the opposite approach. Because you are your customer’s status quo, you can use Status Quo Bias to your advantage. Lean into the risk of changing from their current situation and reinforce your value as the safest choice.
using a one-size-fits-all approach puts your revenue and growth at risk
Our studies found that the most effective message for acquiring new prospects is a disruption-minded message that creates urgency and drives big changes and mentality shifts in your prospects.
But “big changes” aren’t always the goal when you’re trying to persuade your customers to stay and grow their business with you. So it’s no surprise that the same provocative approach that worked wonders in a customer acquisition scenario actually backfired in a customer expansion one.
Corporate Visions, in partnership with academic researchers, found that using a provocative, challenging message with existing customers—when you’re trying to renew or expand business with them—will actually backfire, increasing your risk of losing them to your competitors by at least 10–16 percent.
Considering that most of your revenue and growth will likely come from renewals and upsells, you don’t want to provoke your hard-won customers so much that you accidentally open the door for your competition.
Instead of approaching every conversation the same way, you need to consider your buyer’s specific situation and tailor your approach to match the moment.
Win more customer acquisition and customer expansion conversations
Your prospects and customers are asking themselves important questions when they’re deciding to make a purchase from you. Questions like:
Why Change – Why should I change from my current situation?
Why You – Why should I choose you instead of someone else?
Why Stay – Why should I renew with you?
Why Evolve – Why should I expand my relationship with you?
To answer these questions effectively, you need to build persuasive messages, deliver them in memorable content, and build situational skills to address the unique psychology and pressures within each of these commercial conversations. Only with Corporate Visions will you learn scientifically tested approaches for enabling buyers to choose you—on both the acquisition and the expansion sides of the Customer Deciding Journey.