Customer marketing has the power to transform businesses and change bottom lines. It is a powerful and timely growth tool and a strategic asset in today’s volatile consumer landscape.
Built around activities designed to drive retention, loyalty, advocacy, growth and participation for current customers, the strategy focuses on creating strong customer relationships.
Why Market to Existing Customers?
Leading business consultants such as Gartner and Forrester consider increasing customer loyalty a priority for marketing decision-makers worldwide.
And the best news is that the foundations for customer marketing already exist within each and every business: data and information about existing customers is constantly collected and stored in companies’ databases. Utilizing it systematically can make a real difference for brands’ bottom line.
They bring in more revenue: “Companies that focus their marketing on existing customers see a 20% increase in revenues.” — Gartner
They represent top marketing ROI: “Increasing your customer retention rate by just 5% can lead to an increase of 25%-90% in profit.” — Bain & Co
They’re more responsive: “The probability of selling to an existing customer is 60-70%. The probability of selling to a new prospect is only 5 percent to 20 percent.” — Marketing Metrics
Existing customers are a critical driver of every company’s success. Their loyal relationship with the brand means that they make more and larger transactions than new customers, and are responsible for a significant percentage of revenues.
In an environment of extreme competition, nurturing these customers is crucial.
According to a vertical-wide study, 60 percent to 80 percent of top companies’ revenues come from existing customers.
Across all verticals, existing customers have a 13 percent higher average transaction value. They account for 3.7 times more monthly transactions than new customers. Not only that: happy existing customers are the best acquisition strategy out there.
Most people choose word of mouth as the most important factor in purchasing from brands. The road to acquisition goes through retaining happy customers.
The Challenges of Customer Marketing
Despite its promise and relative ease of implementation, many companies avoid or fail at executing efficient customer marketing. Recent research by Sailthru reveals that only 18 percent of companies focus on customer retention and conduct strategic customer marketing.
The rest still lack a systematic methodology for how to best address existing customers, and fail to transform the data they have into tangible, actionable insights around which marketing activities can be structured.
Many companies still conduct their customer marketing without the use of appropriate technology. The result is often crude communications with existing customers, with slow execution cycles and rudimentary segmentation and messaging.
In these cases, customer marketing depends on BI analysts and data scientists that do not report directly to marketing. This results in cumbersome marketing execution cycles, where sophisticated campaigns take an exceedingly long time to implement and execute.
To simplify these processes, marketing often avoids personalization, leading to mass emails that cater to no one’s needs or tastes and end up as marketing clutter.
In addition, the wrong metrics are being measured: open-rates and click-through rates are a poor proxy for true business performance measurements, and deliver little actual business value.
Getting Started With Customer Marketing
The data you collect from your loyal customers is an untapped goldmine. Everything you need to conduct cutting edge customer marketing is already at the tips of your fingers. Your customers’ behavioral, transactional, sociographic and browsing behavior data is all stored in your existing database.
Tapping into this data will allow for accurate segmentation, targeting and personalization that is the bread and butter of customer marketing. This means that instead of the guesswork you’re accustomed to today, your customers will be segmented into meaningful groups, allowing you to communicate with each group according to its members’ preferences, tendencies and wants.
The Solution That Works
The differentiating factor between customer marketing and customer marketing that really works is software built from the ground up to nurture your existing clients and turn them into a business and revenue growth engine.
Your customer marketing software should bridge the gap between data insights and strategic, targeted marketing actions. This will allow for effective, personalized, automated and scalable retention marketing, and rapid work cycles from ideation through execution and analysis.
Best of breed customer marketing solutions use predictive analytics, allowing businesses to target the right users with the right message at the right time.
Machine learning enables brands to continuously increase the segmentation resolution and personalization of their customer targeting. A centralized marketing hub gives marketers full control of all channels and messaging, including real-time capabilities and orchestrated multichannel campaigns.
Getting to know your customers through the leading in predictive analytics and machine learning will enable you to improve your communications tenfold and reap the benefits of a loyal, engaged customer base for your brand.