Rise of Customer Marketing: The Opportunity You May Be Missing
We’re all familiar with the statistics showing how much cheaper it is to sell to an existing customer versus attracting a new one. But how many marketing departments are letting this reality guide their strategies?
It goes without saying that customer retention is highly valuable, and many organizations have Customer Success Teams (or some variation) in place to ensure satisfaction and continued patronage. But for marketers, the real opportunity lies in upselling and growing revenue within your existing customer base.
Enter: customer marketing.
Why Customer Marketing?
It’s easy to understand why marketers are so heavily focused on acquiring new business. That’s fresh income in the bank, and everyone can appreciate a larger customer base.
But identifying, reaching, and persuading new customers is also expensive and time-consuming. Within your existing clientele, you have a roster of people or companies who have proven willing to do business with you. They are familiar with your brand and hopefully have some affinity for it.
Customer marketing is fast gaining popularity in the B2B space, with 93% of marketers believing it will grow in importance this year and 62% expressing plans to increase budget for programs. According to Capterra B2B Marketing Blog, acquiring new customers can be 5x-12x more expensive than retaining customers. Research indicates that an increase of 5% in customer retention can drive profit increases by 25% to 95%, according to Harvard Business Review. With these kinds of returns, it’s no wonder that a recent Gartner report found that CMOs were spending more on customer retention than customer acquisition by a 2-to-1 ratio.
Marketo defines customer marketing as “marketing that extends beyond acquiring customers and aims to identify and market additional products or services to existing customers, retain them as customers, and develop them into advocates.”
Few things are more powerful in business — especially B2B — than advocates for your brand. They spread the word. They reinforce your credibility. And, with the right approach, they can be key sources of additional revenue.
4 Key Customer Marketing Benefits
There are major advantages to orienting a greater share of your marketing attention toward current customers. Here are four customer marketing perks that any company can appreciate:
Greater Propensity to Buy
As Paul B. Brown explains at Forbes: “If you have done a good job taking care of your customer in the past, and your products have performed well for them, they are usually willing to give any addition to your product line a try. Because the relationship is in place, far less (expensive) selling is required.” Indeed, statistics show that existing customers are 50% more likely to try new products and spend 31% more compared to new customers.
No Buyer Personas Required
When seeking to acquire new customers, marketers often must rely on theoretical buyer personas and lookalike audiences to better understand them. This can be effective — certainly much more so than going in blind — but with your existing customers there is no guesswork required. You already know them. You know their needs, their organizational structures, their communication preferences. This allows you to market to them with extreme precision. Using account-based marketing tools on LinkedIn, you can key in on specific clients with ultra-customized messaging that resonates.
Build Greater Loyalty and Retention
The more we do business with a brand and have good experiences, the less likely we are to move on to someone else. Here’s an apt parallel: receiving shaving razors through the mail, rather than buying them in-store, is now all the rage. When these online blade retailers are able to become your regular source for additional products, like shaving cream and moisturizing lotion, suddenly you have little reason to do business with any of their competitors. And you just might tout the convenience of this arrangement to your friends. It’s similar in the B2B world: The more integrated your products and services become into the daily routine of the organization, the more difficult and even painful it becomes to use another vendor.
Open New Doors
As mentioned earlier, improving relationships with customers and turning them into advocates is hugely valuable. They can essentially become marketers on your behalf (putting a very literal spin on the phrase “customer marketing”) by authentically conveying the value you bring within their own networks. How many of your B2B customers would be able to connect you to other internal departments — not to mention external partners or affiliates — that might have a use for your solution?
Marketing should work in tandem with the Customer Success Team to leverage high levels of satisfaction and identify opportunities to further capitalize.
Customer Marketing is Good Business
At its core, customer marketing is about reinforcing and building upon relationships with your most valuable customers. Even looking beyond the aforementioned avenues for growing new revenue, it’s simply a good practice conducive to long-term retention.
Why should you do customer marketing? The better question is, why not?
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