In order to survive in the competitive market, marketing is essential. With the best practices and continual efforts, businesses are able to retain their existing customers and attract new ones. However, while marketing plays a key role in the success of a business, there are factors that, if not thought of well, could end up ruining the marketing efforts. A good example is fraud. Fraud costs businesses a lot of money every year. But how does it ruin marketing efforts? Consider the following.
Chases Away Existing Customers
One of the key ways online fraud can ruin your business is by chasing away your existing customers. When word gets out that you had an incident, some of the customers will lose trust and look for alternatives. Losing an existing customer is not a good thing for any business. This is because it is cheaper to maintain that existing customer than it is to gain a new one. Therefore, after a fraud incident, a business may end up spending more money to reach the same number of customers it had before the incident.
Reduces Prospect Conversion Rates
One of the key measures of the success of a marketing campaign is the conversion rate. If more prospects turn into customers, then that campaign can be said to be successful. The conversion rate is determined by factors such as how well you deliver the message, the channels you use, and targeting, among others. However, you can do all these well and still get low conversions if you have been a victim of fraud or theft. Just like the existing customers, prospects are likely to lose their confidence in your products or services if they hear anything about fraud, especially if it is touching on consumers.
Increases Negative Reviews
The majority of today’s consumers are internet users. Therefore, when they hear anything about a business, they will post it online. Online reviews and comments get shared a lot, and sadly the negative comments get most shares. Hence, one case of fraud can go viral within minutes. A fraud case’s tweets and reviews can paint a bad name for your business. Also, the information will show up every time someone looks up your business online, and this can lower your conversion rates.
Thankfully, you can respond to comments and reviews and let everyone know you are taking measures to ensure that it never happens again. But the best thing is to do your best to avoid any form of fraud in the first place so that you won’t have to deal with negative publicity. For instance, you can consider identity verification services. These are services that help in fraud prevention by allowing you to verify that customers and other parties are really who they present themselves as. For example, there’s Cognito which helps businesses to verify addresses, names and dates of birth using phone numbers. This is an identity verification service that offers products to help businesses curb fraud and achieve compliance.
Lastly, when fraud strikes and it affects the business financially, you may have fewer funds for marketing.