Customer marketing describes any form of marketing geared specifically towards existing customers. It is focused on improving both growth and retention for your current customer base. Customer relationship marketing is a strategy to reduce the customer churn or attrition rate of a business.
While most of the marketing content we see tends to be geared towards getting new customers, it’s become clear in recent years that customer centric marketing is a hugely valuable tool for both B2B and B2C businesses in any sector.
Why is customer marketing important?
Customer marketing is important because your existing customers are important. Any business should give as much attention to customer retention as customer acquisition, if not more, because it’s easier and cheaper to get repeat sales from existing customers than first-time sales from new customers.
Research published by the Harvard Business Review shows that it can cost anywhere between 5 to 25 times more to gain a new customer than it does to keep an existing customer. The study also found that in increasing customer retention rates by just 5%, a business can see a 25% to 95% increase in profits.
The reason for this is that gaining new customers means having to spend more time and resources on advertising and marketing to first grab the attention of prospective customers. Consider the AIDA marketing model, which stands for Attention, Interest, Desire and Action. This describes the journey you must facilitate to gain a new customer. You need to grab their attention first, then pique their interest and instil a desire to own your product before encouraging action and making a sale. That doesn’t just take a lot of work, it takes a lot of money, too.
With your existing customers, you’ve done all of that, you’ve already gained brand awareness and engagement, now your primary focus is loyalty.
What should customer centric marketing accomplish?
The primary goal of customer relationship marketing is to increase customer retention, but it can stretch beyond that.
Customer lifetime value (CLV) refers to the amount of money a customer will give to your business throughout their relationship. It’s a way of understanding the true, measurable value of your customers. You can use our guide to calculate CLV.
Increasing your average CLV is perhaps the best way to ensure growth for your business, and customer marketing is the best way to better your CLV. If you can forge a continued, active relationship with your customers through your marketing strategy, and they’re encouraged to make repeat purchases, you’ll see huge growth in customer lifetime value.
Customer centric marketing doesn’t mean giving up on new customers altogether. As a matter of fact, strong customer marketing can actually help you gain new customers without the costs that usually come with doing so.
Let’s not forget – your customers are also your ambassadors. A strong relationship with your existing customers means they’re far more likely to spread the word about your brand to their peers, organically marketing your product or service without you having to do a thing.
You’ll be able to increase brand awareness and reputation simply by maintaining a valuable relationship with your existing customers. Positive reviews for your brand are a great example of how your relationship with existing customers can encourage prospective customers to come on board.
Types of customer relationship marketing
When you’re marketing your product to new audiences, you’ll likely use more traditional methods like display advertising or digital PR, but the approach is a bit different when it comes to customer relationship marketing.
You might consider creating a customer loyalty or rewards programme to incentivise an ongoing relationship with your customers. Similarly, devising a referral programme where existing customers are rewarded for inviting new customers to join is a great customer marketing strategy.
Influencer marketing is hugely important in today’s landscape, and it’s a strategy that can be used to help retain customers for your business. Collaborating with influencers and micro-influencers to create ongoing content is a great way to keep customers engaged with your brand. There are tools you can use to find out if there are any influencers among your customer base. Then, it can be as simple as having them post about your product, and reposting their endorsement on your own social channels.
Speaking of which, maintaining a strong social media presence is one of the best ways to maintain a relationship with your most devoted customers. That goes beyond just having social accounts, it includes posting consistently and directly engaging with customers through comments and shares.
Outside of influencers, sharing and encouraging user generated content – like photos of customers with your product – shows that you value your customers and helps build a community around your product.
As mentioned, encouraging and highlighting reviews, ratings, and testimonials is a great way to use your existing customers’ satisfaction to connect with new audiences.
Email marketing is another way to maintain an ongoing relationship with your customers.
Customer lifecycle marketing
Customer lifecycle marketing is a form of customer marketing that uses different approaches for different stages of the customer journey. You can use customer relationship management (CRM) tools to gather data and insights and help segment your customer base. This way, you can offer a more personalised experience for your customers based on their specific relationship with your brand and product.
You can segment your customer base using demographic information like location, age or gender, or using data based on their purchase history, like date of first purchase, most recent purchase, or how frequently the customer engages with you on social or email channels.
Your elder customers may be better engaged by email or Facebook while younger customers might be better reached through Instagram, for example. Customer marketing is about understanding your customer and building loyalty through personalised connections, so understanding how different customers engage is essential.
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