Many of the articles floating on the internet speak about a pressing issue with marketing strategies, placing more significance on the acquisition and attaching less importance on present customers. But is this allegation true? Are the marketers genuinely ignoring their current clientele??
A survey conducted by Regalix in recent past did suggest that they likely are, which revealed the top marketing objectives for 2016 were generating more leads and increasing revenue, while goals related to engaging present customers were found to be at the bottom end on the priority list.
Increasing market reach is essential, and it will always be so. However, marketing should not end once the ink on the contract is dry. Many business houses are not keen to leverage their present set of clients as soon as they make an initial purchase.
Engaging the present customers has a positive influence on overall business objectives in numerous ways, including an increase in revenue by creating opportunities to sell additional items and services. The crux of the situation is that not enough business corporations associate these top objectives with customer marketing.
Why smart business organizations market to present customers?
Top performing companies do acknowledge the fact, when the appropriate marketing messages reach present customers in the proper time, they can potentially leave a substantial impact on the lifetime value of the customers and revenue targets. Though every business is one-of-a-kind and the stuff that providers want others to do after those people become customers differentiates from one organization to the other, the following are the critical reasons behind marketing to the existing customers.
Increasing retention
Marketing to present customers can improve affinity by reminding those people of the company from whom they made a purchase (it could be a product, or perhaps, a service; or both), its offerings, and their worth. Taking the forefront of a customer’s mind reinforces a company’s existing relationship with that buyer, and makes them more loyal to that provider.
More customer loyalty means that they are more likely to remain with their present company, and this retention is further improved when the value of a company is illustrated by incorporating education material into their marketing messages. The organizations should remember to tailor their messages for every customer and make those messages sound relevant to their existing investments in that company. If someone has bought software, the manufacturer could send them additional information about the features and tools of that software they happened to overlook.
A research study done by the Gartner Group found, present customers do wish to receive such marketing content and suggestions, how to derive the maximum benefit from the purchases they made. A company creates a room for future opportunities to send additional marketing messages, by offering their customers educational material concerning best practices. The aforementioned Gartner Group study discovered that every seventy-two customers out of hundred actually anticipate additional, tailored marketing promotions.
Boosting revenue
Present customers typically tend to be more reliable buyers in comparison with the new ones. As a provider increases cross-sell, up-sell, and various other offers to present customers, new product purchases or upgrades are more likely to happen. Research from B&C or Bain & Company too demonstrated that present customers tend to shell out higher amounts on this type of additional or repeat transactions.
Increase in earned revenue is directly proportional to the loyalty of customers. Educational messages sent by the company motivate them to remain loyal to that business concern, which translates to additional purchases. If done right, a twenty percent increase in revenue can be witnessed just by pitching to existing customers.
The substantial increase in revenue can be attributed to the comparatively higher margins generated by purchases made by present customers. With new customers, the companies are required to spend time and also money presenting themselves, their offers, and their brand equity.
But with existing customers, the providers can afford to skip this step, as they have already created a well-articulated relationship with their present patrons. The current customers already are aware of their providers, and hopefully, those customers already have faith in those companies. As a consequence, any sales budget allocated to existing customers costs less than that of the new ones, and it further results in higher overall revenue.
The thing that really needs to be done is to maintain one’s focus on what the customers have already bought. Presumably, they have undergone the purchase process so that a defined set of objectives can be accomplished. The new offers from a provider should religiously include cross-sells, up-sells, add-ons, and upgrades that are built on the present purchases of the customers. Promotional offers related to enhancement and improvement draw the interest of the customers to the maximum possible extent and tend to result in additional sales and also improved retention.
Reaching out to potential customers by harnessing the networks of the present ones
The most significant reason that can be attributed to marketing to present customers is their ability to influence the prospective ones. By engaging satisfied customers to one’s marketing and sales processes, a company can attract prospects, turn those people into leads, and nurture them to the point they become customers. It all starts as happy customers spontaneously promote their providers to the business circles and networks they belong.
Present customer advocates are pretty much willing to narrate their success stories with the products and services they use in the social media, conferences, and at interviews. These testimonials offer social proof, help to attract new prospects into the lead funnel of a company, and provide buyers with perfect confidence in the solutions suggested by that organization while they zero in on their final selection. In an online community platform of a provider, customer ambassadors can continue communicating with leads all along the decision-making process and help that provider close a new sale.
When a provider starts to concentrate on marketing to the present customers and focus on offering those customers new products and services, one also provides existing customers with fresh information for these advocates for discussing with their co-workers and friends. The killer combination of new products, success stories, and conversation builds a compelling purchase atmosphere for the prospects.
Effective customer advocacies and testimonials render an enormous impact on the lead generation as well as the acquisition process of a company. An organization can more comfortably link existing customer advocates with the prospective ones, by taking charge of this process and environment.
Marketing to present customers takeaway
Maintaining cordial relations and effectively communicating with the present customers do have a fantabulous impact on one’s organization. The corporate houses can increase their revenue by concentrating more on how to market to the existing customers, improving the lifetime value of the customers, and also tapping into a reasonably authoritative source to grow their businesses.
If the providers wish to obtain as much as possible from this particular group, it is suggested that they should begin with the activity data and purchase information of the customers, which are going to be used soon thereafter for preparing a customized marketing strategy. The marketing companies should not forget to tailor each of the marketing messages to include relevant education material for every customer, and also make sure that present an upcoming offers relate to their past purchases. It will lead to repeat business, new and additional sales, and also advocacy.
The providers should keep in mind that making existing customers to do actions that are crucial to their companies is easier when compared to marketing to prospects. Effectively marketing to the present customers will aid the organizations to achieve core objectives like improving customer retention and increasing revenue.