An important aspect of any business is determining the price you pay for new customers. The cost of a new customer is generally calculated as a function of marketing and sales expense using metrics such as Cost Per Acquisition (CPA).
However, there is a soft cost that is rarely discussed: the alienation of existing customers due to changes made to acquire new customers.
As some of you know, mixed martial arts (MMA) is my favorite sport. I even wrote a post on the original blog: 3 Lessons Small Business Owners Can Learn from Mixed Martial Arts.
Late in 2011, The Ultimate Fighting Championship, the marquee MMA organization, announced that it had signed a 7 year deal with FOX. Having been resigned to obscurity in its early years and constrained by the limitations of cable television as it grew, the UFC’s FOX agreement was a huge leap forward for the sport and for the organization.
The deal exposed the UFC to a massive new audience, made available through FOX and its sister properties of F/X and FUEL TV.
I was excited about the agreement and happy to see my favorite sport gain mainstream acceptance, that is…
…until I heard the intro music during the first UFC on FOX broadcast.
The hard-hitting metal music that had become the UFC’s trademark had been replaced by generic, brass section network sports music.
It sort of sucked.
Obviously, I was not the only fan to feel that way. As UFC President Dana White said in an interview on FUEL TV:
“One of the biggest complaints I got when we started this FOX deal was the NFL music. They all call it the FOX NFL music. It’s not the NFL music; it’s the FOX Sports music. So if you watch any sporting event on FOX, that’s the music they play. I like being on FOX Sports.”
Now, coming from the business world, I understood. Such is the price of being on FOX; you are part of the FOX Sports brand and subject to their branding.
For me, the intro song really did not matter, but it did get me thinking about organizational change and the soft cost of new customers.
No matter what your business, as you create and manage growth, you will inevitably change some of the things that attracted your early customers to you.
Successful bloggers see this often. As they approach a certain level, their engagement with their community drops. It is one thing to respond to every comment when you get 10 per post; it is another matter entirely when you get 50. Inevitably, some of the early community members will take umbrage at the blogger’s lack of engagement, complaining publicly and sometimes even insulting the person they once admired.
Successful retail businesses endure this as well. It always pains me when one of my earliest customers says to me: I really miss how it was in the old days. It just felt like family here. Sure, we can do everything possible to try to personalize that customer’s experience and to make them feel as special and valued as possible, but we can never go back to how it was.
Nor would we want to.
Our lobby has more people in it. Our staff is quadruple the size it was during our first few months. Every customer experience initiative in the book will not make it feel like it used to.
Let’s face it: Assuming they are equally as profitable, more customers are better than fewer customers. And unfortunately, more customers comes with a price tag that we often do not discuss.
Do everything you can to help your loyal customers feel comfortable with the changes in your organization as you grow, but just realize that sometimes you will annoy one old customer trying to gain five new ones.
When this happens; don’t sweat it too much. As any UFC fan knows, you can’t win them all — unless your name is Anderson Silva.
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