There’s a well-known marketing model that preaches the five steps of acquiring any new customer. It starts with awareness, which develops into interest, then becomes consideration, until a purchase happens and, ideally, you recruit a loyal customer advocate.
Of course, a consumer’s journey isn’t quite as linear as that but as a general guide, it’s a reliable structure to align your business’ marketing activity with.
What we’ll explore today is that last phase – how the loyalty/advocacy part of a customer’s journey is often underestimated by businesses, and how it can be used to increase revenue.
Let’s start with the reasons why a lot of businesses don’t consciously focus on the creation and nurture of customer advocates.
They wrongly assume customer loyalty/advocacy is taken care of using customer service
In some respects this view is true. It doesn’t matter how well you market to a consumer after they’ve purchased from you if they had a bad experience with your brand. It’s going to be an uphill battle to convince them their negative interaction with your business was a one-off, especially if there are others who have posted negative reviews online.
Likewise, following through with superb customer service and a product that meets expectations can win you a loyal customer and potentially one that’s happy to refer your business to their friends, family, colleagues, and the general internet population.
However, according to 2017 McKinsey Research, just 13% of customers are loyalists, who don’t shop around. So if you have a product that allows for repeat purchases, you can pretty much assume that the majority of your customers will scope out the competition when they next need or want to make a purchase. They might even be two-timing you with the competition already.
While your brand may well retain a customer’s loyalty based on its merits for price, quality and customer service, can you afford to simply hope their experience will be enough to bring them back? Probably not, which is why a focus on customer retention is essential.
Focus on marketing to existing customers, not just new potential ones
I’ve worked with market leaders in various industries who focused one hundred per cent of their marketing attention and efforts on finding and getting sales from brand new customers. They completely overlooked the potential to drive revenue from their existing customer base.
This is a mistake, of course, because studies have shown that generating new customers is anywhere from five to 25 times more expensive than retaining new ones. What’s more, according to the White House Office of Consumer Affairs, on average, loyal customers are worth up to 10 times as much as their first purchase.
Lead generation is important, but failing to have a customer marketing strategy that drives retention and repeat purchase is overlooking a cheaper and arguably easier route to increasing your business revenue.
So, how do you turn a regular customer into a loyal customer advocate?
Have a customer marketing strategy that is focused on regular engagement
Even more, ensure this engagement strategy allows for personalised communications.
We’re at an age in marketing where simply asking customers to follow you on social media and sending them a generic email newsletter is not enough to make them feel loyal to your brand.
This is partly because less than a quarter of your social media followers will see your social media updates, meaning seventy-five per cent won’t receive these communications.
It’s also thanks to the development of marketing technology giving us the ability to use customer data to segment people into email lists that fit directly with their profile as a consumer, their previous history with our brand, and their behaviours online.
In short, your customers expect tailored and relevant communications.
To develop a successful customer marketing strategy, you need a clear understanding of the different customer types your business has and develop engaging content that is designed for each of these.
Once you know the content you want to deliver to your customers, invest in software that will help you to set up an automated system that can do all the legwork for you when a new customer is added to your database. There are hundreds of platforms that do this and a lot of them are surprisingly low cost. My personal favourite for small businesses is ActiveCampaign.
OK, you’re running a customer engagement strategy, how does this encourage advocacy?
Marketing to your previous or current customers for repeat purchases or to upsell a new product is one part of the equation. Next is figuring out the best way for your business to actively drive new customer referrals using these customers.
Let’s not forget that people are busy and though they may be happy to recommend your brand to a friend when asked directly for their thoughts, most won’t advocate your business off their own back.
The answer? Ask!
Give them an implicit reason and incentive and make it easy for them to take action using online channels like email, social media, instant messenger etc.
Just a few ideas of what this could be are:
- A discount reward for each new customer they refer
- Entry into a giveaway or competition in exchange for sharing an offer online
- Invitation to an exclusive event or offer if they refer a new customer by a set date
- A free upgrade or added bonus when they refer X amount of new customers
The right advocacy scheme for a business will differ by the industry and product on offer.
Where to begin with customer marketing
If customer marketing hasn’t even crossed your radar until now, starting this journey may seem a little overwhelming and time-consuming. Really though, you can begin to make small changes today that will help you on your way.
For example, if you’re not collecting customer data and storing it in an online database, commonly known as a CRM (customer relationship management system), make that your starting point.
Then go to the next phase, profiling your main customer types and documenting everything you know about them.
From there, it’s about working out the right types of communication to send each customer type and setting up the logistics needed to execute these efficiently and at an affordable cost.
Lastly, get going and measure what’s working and what’s not.
Always be optimising to improve performance and track your efforts back to tangible business metrics i.e. sales, average sales value, revenue, ROI and profit.
If you’d like to discuss any of the information in this blog post and talk through the questions that are specific to your business, arrange a free 10-minute phone call with me.
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