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March 7, 2016
Customer Service  |  4 min read

To Grow Your Business, Stop Focusing so Much on Leads

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Amy Saunders
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If you’re looking to increase revenue, one solution is obvious: Get more customers.

That was Nate Shaw’s initial strategy in 2010, when he opened Brooklyn Music Factory, a school that teaches music through games and group jams. To expand the school beyond the 60 families he’d been teaching privately, he poured himself into plastering flyers across the neighborhood and perfecting his pitch to close a sale.

“It was all about, ‘How do I get more and more and more leads?’” he said. 

Shaw now considers his narrow focus on leads and sales his biggest “rookie move” of starting a business. The strategy that ultimately helped him succeed would have been unthinkable earlier on: Brooklyn Music Factory grew exponentially after Shaw tossed out his list of prospects. 

The importance of retaining customers

All business owners know they need to attract and acquire more customers. But some, like Shaw, learn the hard way that retaining customers is equally—if not more—important.

Adding a new customer typically doesn’t make up for losing one, considering the extra time and money involved in selling. Existing customers are inherently sold on the idea of your business, which makes them more receptive to the idea of making a purchase again. 

That’s why the likelihood of selling to an existing customer is 60 to 70 percent, compared with 5 to 20 percent for a new prospect, according to the book Marketing Metrics. And the more customers buy from you, the more likely they are to recommend your company to others—which can result in even more business.

Shaw had an epiphany about the importance of customer retention in 2013, when more than 50 families left the Brooklyn Music Factory over one summer. While working “insane hours” to grow the business, he hadn’t realized that his focus on new leads was coming at the expense of his current customers.

“When 50 families leave, I’m freaking out about revenue streams; I’m freaking out about my employees. But more than anything, that totally bums me out,” Shaw said. “That’s 50 families who don’t see music as a viable option because somehow, we failed them.”

Growth through retention

Shaw reset his strategy by scrapping the list of leads he’d worked tirelessly to build, keeping only the 130 families currently enrolled at the school.

To understand the cause of customers’ unhappiness, he asked parents for their input and revamped faculty training to ensure better consistency in their teaching.

He changed the tone of his marketing efforts, shifting away from sales-oriented messages in favor of emails catered to customers’ interests and educational blog posts that helped parents support their kids. 

And he refocused his sales efforts, looking for customers who were interested in being part of the school for a decade or more—not just any families who’d sign up for a class.

By turning his attention to his existing customers, Shaw achieved what he’d set out to do in the early days of posting flyers. Now that he’s better retaining customers, who are referring other families, his email list has grown to 1,900 recipients—and revenue for Brooklyn Music Factory has increased by four times. The shift has allowed Shaw not only to grow his business, but to spread his passion for music.

Shaw’s success earned him the 2016 Small Business ICON Award, a prize worth $10,000 and other benefits, at the Infusionsoft annual conference last week. And in growing the business, Shaw is fulfilling another lifelong goal: spreading his passion for music.

“I expect and want everyone to be playing music for the rest of their lives,” he said. “But more important than anything, music is too much of a gift for us not to play.”

To read more of Shaw’s story and learn strategies to help your business grow, download our free e-book, “Repeating History: Small Business Strategies for Earning Repeat Business and Customer Loyalty.” 

Repeating History: Small Business Strategies for Earning Repeat Sales and Customer Loyalty - Download Now



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