What Is Leaking Bucket Marketing?

Leaking bucket marketing refers to a customer acquisition style. It is helpful to envision a bucket under a faucet, filling with water, some of which is leaking out due to a hole in the bucket. The hole represents a deficiency in the product or service, resulting in the loss of customers. The faucet represents an influx of new customers who have either never tried the product or are switching to this product from a competitor.

Leaking bucket marketing is a marketing strategy implemented in response to a quality issue resulting in the loss of customers. The company must decide how it will approach the loss of business and must do so quickly before, metaphorically, so much water has leaked from the bucket that it would be impossible to compensate for the loss. The goal of leaking bucket marketing is to maintain a constant level of customers in the "bucket" at any given time.

One solution to the problem of a leaking bucket is to patch the hole. In terms of business, this means isolating the issue causing business loss and fixing it promptly and efficiently. This strategy is simple, safe and poses relatively little financial risk. This strategy focuses on the customers at hand who have not leaked from the bucket and, according to the Canadian-based consulting firm The Dunvegan Group, cost five times less than the cost of acquiring a new customer.

An alternative solution to the leaking bucket problem is to input enough water, despite the leak, to keep the water level even. In terms of business, this means acquiring enough new customers to compensate for lost customers that the business continues to thrive and maintain steady client levels. As explained above, acquiring new customers is a costly leaking bucket market strategy, but one that can work to maintain levels. According to Experian Integrated Marketing, companies delivering acquisition strategies using less aggressive, more holistic approaches stand to gain the highest benefit from this marketing technique. Experian also warns against aggressive acquisition tactics, such as offering products at rock bottom, unsustainable prices in an effort to bring clientele in the door.

If possible, the Dunvegan Group suggests speaking with lost customers to determine what caused them to leave your company in search of an alternative. At the very least, this information will provide you with insight on competitor strategies and how to prevent this leak in the future. Experian further explains that customers want to work with companies willing to expand and evolve with them. Too often, companies treat their customers as they did five years ago, while many customers go through major life changes in this time and expect providers to accommodate their needs.