I recently came across an interesting blog on marketing to your existing customer base called, "The new customer marketing lifecycle in the Engagement Economy by Chandar Pattabahrim via the Marketing Land daily news update.
In his blog, Pattabahrim provides an interesting perspective on how businesses need to view existing customers in what he calls the "Engagement Economy."
We're all familiar with the social media terms lurker and liker and enthusiast. But how often have we looked at these terms from the vantage point of our existing customer base? More often than not businesses apply these tags to leads, not individuals already on board with their brand.
Many companies focus so much energy and cash to generate new leads and business that very often the existing base of customers gets ignored. Opportunities to nurture existing, loyal customers towards cross-selling opportunities and becoming staunch brand advocates falls by the wayside.
Conversely, many businesses make the mistake of being overly aggressive, up-selling and cross-selling to customers that are too new or just not ready to buy more.
Pattabahrim makes the case that retention marketing is critical to success in an economy where switching allegiances is so easy and pain free.
He writes:
"This is because the Engagement Economy is rife with business models where customer switching costs are low. Think of ride-sharing apps: Lyft and Uber must constantly compete for attention and brand affinity, as users can switch between them with virtually no headaches. Although it’s on a larger scale, the same paradigm applies to the B2B world, where an organization can switch out Cloud-based applications with minimal long-term commitment."
The ease with which a customer can drop your brand and pick up another is unprecedented in the current engagement economy. So what can a business do to retain its customers by providing continual value while simultaneously generating additional revenue from existing users?
First, we have to understand the characteristics of your different customer archetypes — or personas — in order to maximize retention strategies and brand advocacy. According to Pattabahrim, three main archetypes exist:
This group uses a product or service but does not engage with the brand beyond that. They are most likely to leave your brand for another at the drop of a hat. Given their lack of engagement, mining this group for cross selling opportunities or nurturing them to become brand champions is not likely to succeed.
This customer type is more loyal and is open to continued engagement. They offer, according to Pattabahrim, more reliable revenue streams and are the group you want to convert into brand lovers.
These are your brand champions, the group of customers that advocate for your brand at every turn and opportunity. This is your wellspring of brand equity and high quality referrals. These are your crown jewel customers. While some lovers will be this way from the get go-- no nurturing or cross selling needed--you'll need to convert likers into lovers at a solid rate to realize the potential of your existing customer base.
According to the proverbial 1% rule:
So, what is the composition of your customer base?
Are you paying enough attention to customer retention and marketing?
Are you paying too much attention and throwing too large a portion of your marketing dollars to generating new leads?
Sometimes it's tough to slow down, analyze and see what opportunities your team is missing.
Illumine8 Marketing & PR can help. With strong expertise in persona development, demographic analysis and automated marketing, our team can help you generate new leads and market to your existing customer base to transform your likers into lovers.