[The Worst Number Is One] Why a Company Starts to Tilt Without Multiple Ways to Attract Customers [The Investment Mindset]
From ACIDHOUSE, INC., this is Tetsuya Ashida.
In fact, our service is ranking near the top of search results right now and plenty of customers come to us from there, so we plan to keep it this way for the time being. That's why we don't need advertising.
There is no doubt that companies and businesses like this will reach their end sooner or later.
In this article, I want to dig into why that is.
Attracting customers for free and at a bargain is an urban legend
Let's start with this very common belief—and it truly is just an urban legend.
For example, the go-to examples of free customer acquisition are SEO (ranking high on search engines) and SNS. They may work under the condition that the internet population is small — in other words, in a blue ocean.
But today, with the advance of technology, services and products keep multiplying, and the number of websites keeps growing by orders of magnitude. It is a complete red ocean.
And you must not forget the premise that both SEO and social media stand on top of giant platforms. In most cases, those giant platforms are GAFA (Google, Apple, Facebook, Amazon).
It is true that the policies of these giant platforms are disclosed to some extent, so if you follow them, you are somewhat less likely to be hit hard.
However, that is nothing more than wishful thinking: the actual results are decided by those platforms. Nothing could be more uncertain, and you could say you are in a state of dependence on giant platforms.
Even if there is a moment when you miraculously get results with SEO or social media, can you sustain it?
When conditions change, what you need is money and resources. Realistically, I think expecting results for free with the same methods as before is impossible.
What about word of mouth and press releases?
They sound promising, but both decisively lack the element of "consistency".
You need to reach out to as many people who will recommend you and media outlets that will feature you as possible, so making them your main way of attracting customers is a game you can't win.
Attracting customers is like investing: the proven approach is to diversify
It is a very obvious point, but it's true.
Some channels perform poorly, and some perform well.
So the only proven way is to hedge your risk through diversification while finding the channels that perform well and steadily optimizing them.
And because it is an investment, you also need the nerve to commit the maximum amount while keeping an eye on the risks.
If you penny-pinch and keep it to the minimum, or only chase things you can do for free, there is no way you will get results.
How many ways of attracting customers should you have at minimum?
We can't try all sorts of things, so what is the minimum amount of diversification we need?
"Three" is the magic number for stability.
Once you succeed in attracting customers, turn them into existing customers right away and deepen the relationship
Something common in small businesses is "new-customer-acquisition syndrome".
Once you succeed in attracting someone, obtain contact information such as an email address, and through an email newsletter or similar, make sure you can reach out to them at any time.
Note also that some people, when acquiring new customers, think about getting them to spend money from the very start (and as much as possible), but it is better to avoid that.
That's because in a world with this many choices, customers have no intention of spending money from the start on you, someone they barely know.
At first, offer a product or service that customers find highly valuable, for free or for pocket-money prices.
Then, thinking "Well, if it's free...", customers will take action.
That makes them existing customers.
After that, reach out to the contacts you have obtained over multiple occasions and build a good relationship.
Only after going through that process does the opportunity finally come for customers to spend money with you.