You as a business person are always on the lookout for opportunities. The ability to spot and seize them is a hallmark of a successful entrepreneur.
What if I told you that you might be overlooking an opportunity right on your doorstep? It’s a little like searching the world for a gold mine and coming home to find one six inches under your garden. Many businesses overlook customer marketing—marketing to their past (and even current customers). That is the gold mine in your backyard.
The Marketo blog 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.”
If you serve a customer once and never hear from them again, you have lost a customer. In his book Never Lose A Customer Again, Joey Coleman says that it costs at least six times more to get a new customer than it does to keep a current one.
Your return on investment is almost always better when marketing to current or past customers than when marketing to new leads. Coleman goes on to say, “By keeping more customers and reducing the money spent on customer acquisition, the marketing and sales people might not be too happy, but actual profits will increase by 25 to 100 percent.”
Let’s explore customer marketing further so you can take advantage of this opportunity.
Why it works to market to customers
Customer marketing is effective for several reasons. For starters, (this statistic may vary depending on your industry) as many as 90-100% of your previous customers are still in your target market or have direct connections to people who are.
In addition, people you have served in the past already know you. Hopefully, you have earned some trust, which makes it more likely they will buy from you again. One study reports that businesses have a 60-70% chance of making a sale to an existing customer compared to only 5-20% chance of convincing a brand-new prospect to buy.
It’s a win-win situation when an existing customer decides to do business with you again. They experience less risk and fear of the unknown since they know what to expect from your company. They don’t have to spend time looking for and vetting a new supplier.
From your point of view, previous customers don’t need the extensive onboarding new customers require. You save time and expense because you don’t need to spend as much time on the front-end answering questions and explaining your process and products.
Use information about your customers to personalize your messages to them. You know their purchase history and have a good idea for what other products or services they might be interested in. This increases the effectiveness of your marketing efforts.
Don’t forget the importance of learning from your customers. If we ask and are paying attention, customers can teach us how to serve them better. The better the customer experience we offer, the more customers will return and the less money we need to spend to attract new ones. That’s another win-win!
Why customer marketing is overlooked
If marketing to our existing and former customers is so effective, why don’t we do it more? Here are a few reasons:
- Winning new business offers a thrill missing in simply serving and reaching out to existing customers.
- Mainstream traditional media is geared to generate new leads.
- We sell products like sheds, homes, or caskets that people buy infrequently or only once.
- Compared to the customer’s initial big-ticket purchase, the follow-up sales or service feels too small to be worth it.
- We assume customers will automatically return for another purchase.
- We aren’t sure the best way to go about marketing to customers.
- We may feel intimidated that a previous customer has decided the competition is a better fit for them. Therefore, we hesitate to try to win them back.
- Consistent marketing to customers requires discipline, effort, and planning. Many businesses that start lose inspiration and discontinue before seeing results.
- In some businesses, the payback period is months or even years.
Given some of the benefits we looked at earlier, taking a second look at customer marketing is well worth your time. Your list of customer contact information is a very valuable gold mine.
How to market to customers
At a basic level, marketing to customers is simply staying in touch. But it needs to be done strategically! The details of how you do this will vary, but your goal is to serve the customer with something relevant and valuable, not something disruptive or annoying.
You might be wondering what we do at Rosewood Marketing to market to our customers. We send a monthly newsletter including helpful articles like this one, as well as occasional case studies showing how our clients have overcome marketing challenges. We systematically send thank-you cards, as well as surveys so clients can give us feedback after a project is completed.
In addition, we send reorder reminders for reoccurring jobs such as consumables (notepads, catalogs, pens, business cards) and annual projects.
Some companies send personalized emails, letters, or cards to people they have done business with. Brighten a customer’s day and give them something positive to think about. How can you inform, serve, surprise, or delight them?
Here is a list of ideas to consider. Would your customers appreciate receiving any of the following?
Congratulations: a major purchase, project completion, a life event, an anniversary of doing business.
Relevant news: industry changes and trends, local events, upcoming changes (pricing increases, change of hours, personnel changes, new products)
Special or personalized benefits: private sales, volume-based pricing discounts, a VIP offer, a benefit for paying within terms within a defined period.
A surprise gift: A free upgrade, add-on, or extra month of service. Generosity inspires loyalty.
Educational content or training: Share articles that directly or even indirectly relate to your customers’ daily challenges or interests.
Invitations to give input and feedback: Make it a priority to learn what problems customers have while using or after using your product. Use the feedback to improve for the benefit of your future customers.
Invitations to events: Free food and prizes are always popular.
Thank-you notes: Have you expressed your appreciation to those your business depends on?
Reminders: A timely reminder is a way to serve busy customers while positioning yourself as a business that cares about their needs. What upcoming task do they need to make arrangements for? Examples: schedule a vehicle for state inspection, get the furnace cleaned and ready for a new season, reorder supplies.
Free samples: Send a free sample of a new or improved product. Even if you don’t have a new product to promote, create a cross-sell opportunity by sending a sample of a product the customer has not tried yet.
A free lunch: Call a customer and offer to take them out for lunch.
Loyalty program: A free ______ after their purchases reach a certain threshold.
Referral bonus: Reward and motivate customers to refer others to you. This not only gains a new customer but also increases the chance the referring customer will return.
Create a customer marketing plan
If you are a regular reader of this column, you know that at Rosewood Marketing we believe in the power of planning. Developing and thinking through a plan to reach out to your previous or existing customers makes it more likely you will succeed over the long haul.
If you already have a marketing plan in place, incorporate steps for staying in touch with your customers, and not just acquiring new ones.
Consider these questions:
- What do we want to accomplish with our customer marketing effort? To sell a certain amount of a product? To increase quarterly revenue by a certain percentage? To generate referrals? To increase customer retention rates? To increase the average dollar sale by a certain amount?
- How often should we create customer touchpoints? A touchpoint is any contact someone has with your business or brand.
- Who will be in charge of the customer marketing program? New projects don’t just happen by themselves!
- Who will write the content? Difficulty creating the content is probably the number one reason most businesses lose steam in this area.
- How much time and money should we commit?
- How will we measure results and ROI?
- What communication mediums will we use? Options include email, snail mail, print ads, website banners, videos, phone calls, in-person visits.
- Should we start small and grow as we measure the success of our program, or should we jump in feet first and go all out from the start?
There is usually not a wrong or a right answer to these questions but asking them will help guide you in a direction toward success.
When customer marketing won’t work
No business keeps every single customer. But if you feel that too many customers are walking out the door and never coming back, find out why they are leaving. Is your marketing attracting the wrong kind of customer by,
- Targeting the wrong audience?
- Offering too many discounts to gain new customers?
- Over-promising on what you can actually deliver?
Are your customers feeling frustrated or unsatisfied due to
- Customer service weaknesses or failures?
- Product performance weaknesses or failures?
If any of these scenarios are true for your business, marketing to your customers will not be very effective because they will remember the poor experience they had with you. Identify the problem and work with your team to eliminate it and build customer loyalty.
Conclusion
Ignoring previous customers is ignoring a potential source of new business. Stay in touch so they don’t forget you. They might buy from you again, or they might refer a friend, family member, or neighbor.