Customer acquisition and retention marketing are two sides of the same coin, not different currencies. The challenge for B2B marketers is to connect the dots.
To maximize their marketing effectiveness, B2B marketers need to develop a unified marketing strategy with the customer at the center.
Forrester summarizes this customer-centric approach in their report, B2B Loyalty, The B2C Way:
“B2B marketers need to change their mindset and focus less on products, internal processes, and organizational silos and more on the entire customer relationship, from discovery and purchase to engagement, retention, and loyalty.”
This is where customer marketing comes in. Customer marketing is marketing that revolves around your existing customers, rather than focusing solely on who will become your customers. It’s about driving customer engagement, building loyalty, and attracting brand ambassadors. It’s about creating an optimal customer experience.
Most importantly, it’s about understanding your existing customers. This is the foundation for a more consistent, tailored marketing approach that impacts every stage of the customer relationship. But like everything else, that’s easier said than done.
Three Hurdles to Improving Customer Marketing
There are three reasons why your current marketing strategy may not be as consistent as it should be.
Most B2B marketers spend the majority of their marketing budget on customer acquisition. Even if you’re focusing your customer marketing efforts, you’re probably still primarily thinking about building new business. For example, you might ask existing customers for references to use as social proof for business development. While this is laudable, it doesn’t maximize the potential of customer marketing.
You probably lack the systems necessary to scale coordinated customer marketing efforts. Your customer touchpoints are diverse, making it difficult to collect, analyze, and apply insights in a structured way across the entire customer lifecycle.
Once a customer joins your company, the responsibility for what happens next is often placed on someone else: salespeople identify upsell and cross-sell opportunities. Account managers and customer service to keep your customers happy. Supporting your team to ensure your product works as expected. Responsibilities are fragmented and certainly not a coherent customer marketing strategy. In fact, a siloed, activity-based marketing strategy is easier to implement than a connected customer approach, at least in the current system. Before we get into the innovations that will overcome these hurdles, let’s look at why you need a supported customer marketing approach. 4 Biggest Benefits of Customer Marketing
Overcome the Data Gap in Customer Acquisition
You’ve heard all the statistics. No matter what you do, customer acquisition costs more than retention because you don’t have as much insight into your potential customers as you do into your existing ones. Existing customers are the easiest target to reach. You can run more effective campaigns because you already have a ton of data about them.
Understanding your customers is at the core of effective customer marketing. But that’s the point. The better you understand your customers, the more effective your marketing will be throughout the entire customer cycle, including customer acquisition. Customer marketing can fill in the data gaps, making your ideal customer profile goals all the more attainable.
Increased customer loyalty increases profits
According to a study by Bain and Company, a 5% increase in customer retention can increase profits by 25% to 95%. That’s crazy, right? Think about how much money that leaves on the table. At BrightTarget, we conservatively believe that aggressive customer retention campaigns can reduce customer churn by 1% per year, and that the cost of customer churn can reach millions of pounds. Even if you take all the statistics with a pinch of salt, it’s pretty compelling.
Customers are your greatest asset
Few things, if any, impact your brand more than positive word of mouth. Just like bragging at a party, you can say whatever you want about yourself, but what matters is what people say when you leave the room. In both the B2B and B2C worlds, customers have the power to make or break a brand. You can reap the benefits of this with customer marketing. The more you understand your customers, the better you can meet their needs. Customer marketing helps you deliver a great customer experience and attract brand ambassadors.
Customer marketing is a competitive advantage
Today’s customers want more. Few, if any, industries today can be pervasive with “me-too” products. And if you are now, it won’t be long. How you treat your customers after the sale is a key factor in your success. This will determine whether these customers will continue, recommend, or upgrade. This will keep them from running away when a competitor comes along with a cheaper offer.
So you’re convinced, but the most important question remains: How do you do it?
Most B2B marketers embrace the principles of connected, customer-centric marketing, but this is all easier said than done. How can you overcome the three hurdles listed to develop a strong, consistent, and effective customer marketing strategy?
Predictive Analytics: The Future of Customer Marketing
An effective customer marketing strategy relies on a comprehensive and deep understanding of your customers. Insights from multiple sources must be brought together to create a single, unified view that can be acted on consistently across silos.
Predictive technologies make it easy to create this unified view by sifting through millions of data signals to develop a core understanding of your customers. This is a customer-centric approach that Forrester describes.
A very important aspect is customer lifetime value (CLV). CLV accurately predicts a customer’s total financial value over time. It drives the “shift in thinking” recommended by Forrester by assigning tangible value to previously intangible assets like loyalty, engagement, and trust. These insights allow you to focus your marketing efforts on the accounts that are most valuable throughout their lives.
The underlying point is this: Predictive technology gives you the intelligence to speak to your most influential customers, in the most impactful ways, at the most impactful moments.
This is felt throughout the entire customer relationship, from sales to engagement, retention, and loyalty. You can use it to identify hidden up-sell and cross-sell opportunities; You can make your activities more targeted and proactive; You can predict which inactive customers are most likely to come back and which active customers are most likely to churn.
Of particular interest is relocation. Currently, your company’s customer marketing probably relies heavily on churn analysis. The problem is that churn is viewed retroactively; it’s a report, not a forecast. Any guesses you make based on these numbers are essentially guesses based on human analysis (which is inevitably flawed and limited).
Predictive platforms, on the other hand, can transform churn from a historical metric into a future metric. Jill Avery, a lecturer at Harvard Business School, told Harvard Business Review:
“The most innovative companies use churn analysis as an opportunity to predict customer loss, rather than simply accept it.”
Predictive technologies using machine learning and AI can extrapolate from millions of different data sources to know which customers are likely to churn, even before they do. With this deep understanding, you can create targeted campaigns for customers at risk of retention and address the problem before it becomes severe. As Avery says, that’s how you move forward.
To show how this works, let’s look at some numbers from one customer: In 2016, sales were 13.9 billion euros. A 10% churn rate means a loss of 1.3 billion euros per year. So a predictive solution with 70% accuracy (which improves over time with machine learning) could predict a churn rate of 1 billion euros per year. Taking into account a 1% reduction from proactive customer retention measures, the company aims to save 100 million euros per year, with an ROI of 99.5 million euros after costs.
And this only takes into account customer churn. The customer could also gain several million more euros through reactivation of high-quality customers, almost a million euros through improved cross-selling effectiveness, and several million euros through more targeted acquisition activities as a result of better segmentation.
That’s pretty impressive, if you ask us. And it’s a model that you can easily prove in your business with our Predictive Marketing Accelerator using your own data.
It’s easy to see why Gartner believes that companies that don’t invest in predictive technology will soon see declining revenues as competitors follow suit.
Unlock the full sales potential of your customer base In the age of the customer, B2B marketers need to change their perspective, but many are not doing enough. Lack of accountability, silos, data overload and improper budget allocation mean you’re wasting money.
Predictive Change: A predictive platform solves your data problems by instantly assessing what’s relevant and creating key actionable insights across silos. These insights allow you to create smart, targeted and effective marketing campaigns to maximize the sales potential of every customer at every stage of the customer journey. This is a holistic customer approach.
