You have probably heard the phrase, “Now that you’re a customer, the honeymoon is over.” This phrase represents the opinion that after a company has a customer, it can stop making the same efforts that first drew the prospect in and encouraged them to buy. In any business, however, should there be a distinction between prospects and customers regarding how they are handled?
Prospects and customers need to be treated with respect, enthusiasm, etc. Still, there is a difference or philosophy between the two regarding certain specific elements of the buying process. While driving revenue is essential, prospects and customers are at different stages of the buying process. Their needs, expectations, and relationship with the business vary. Treating prospects and customers equally would be a mistake since their interactions with a business serve different purposes.
The Buying Process
Prospects should be treated differently than customers based on their stage in the buying journey, which is generally divided into three stages: awareness, consideration, and decision.
- Prospects are typically in the awareness or consideration stage. They have shown some interest in a business’s products or services but have not yet made a purchasing decision.
- Customers, on the other hand, have already entered and gone through the decision phase of the buying process. They have decided to purchase a product or service, experienced various benefits, solved a problem, and, hopefully, built a certain degree of trust in the business and its products or services.
Due to the stages in the buying process, prospects require more attention, possibly education and coaxing to purchase. At the same time, customers might need ongoing support and communication/follow-up strategies to retain their business in the future for additional purchases.
Building vs. Sustaining Trust
Trust plays an important role in distinguishing prospects from customers. Since a prospect has not yet made a purchase, the business must work to build a sense of trust with the prospect for its products or services. Since a customer has already made a purchase or a repeat purchase, there is an implied degree of trust.
For prospects, the emphasis should be on establishing trust. This might involve providing them with relevant information for the product or service they are considering purchasing, offering demonstrations, testimonials, or other types of proof to establish needed trust.
For customers, the trust issue shifts to maintaining and reinforcing the trust that has already been established. Although a purchase has been made, customers need to remain satisfied so they will make repeat purchases in the future. Ongoing trust can be enhanced through continued communication, after-sales support, loyalty rewards, etc.
Nature of the Relationship
Prospects may show interest in a product or service but can also lose interest; therefore, the business needs to proactively communicate with prospects, pushing them further down the buying process, culminating in a purchase. This might include targeted ads, promotional offers, or follow-up emails to maintain continuing communication and engagement.
In contrast, customers are more likely to engage regularly with the business by making repeat purchases, leaving online reviews, or requesting or requiring customer service support.
Personalization and Communication
- Prospect communication is usually more generalized and frequent but less personalized, focusing on building awareness and educating potential buyers on products or services.
- Customer communication, however, is more personalized and focuses on appreciation, loyalty, and furthering the relationship that has already been established.
Investment of Resources
From a financial perspective, businesses treat prospects and customers differently because the potential return on investment (ROI) differs.
- Since prospects represent future revenue potential, businesses must invest marketing dollars to convert them into current paying customers. The investment is speculative because the prospect may or may not make a purchase.
- Conversely, customers represent current revenue and, ideally, future repeat purchases. Likewise, marketing dollars invested in current customers often yield a better ROI since it is typically less expensive to market to and retain an existing customer than to acquire a new one.
Conclusion
While prospects and customers are vital to a company’s success, they have different needs and expectations. Understanding and addressing these differences allows businesses to create more effective marketing strategies and build ongoing and long-term relationships that will ultimately grow businesses. You might say prospects are the seeds of future business growth while customers are the fruit, offering immediate value and requiring care and attention to ensure continued loyalty.
