Todd Berkowitz, research director at Gartner Inc., says the impact of marketing to existing customers can be great. In a recent post titled, Why Companies Need to Market -- and Not Just Sell -- to Existing Customers,
Berkowitz writes about how important it is for the marketing department to focus on satisfying current customers and increasing customer loyalty, in addition to the usual responsibilities of building brand awareness and attracting marketing-qualified prospects (MQPs).
The Gartner post points out that hitting or missing quarterly sales goals, especially in the B2B world, can come down to whether a few key "new name" prospects inked a deal in the previous three-month period. Those key sales each quarter trickle down to future revenue -- and company momentum in the eyes of Wall Street, media, employees, and beyond.
A Bird in Hand...
As the old clichés say, it's easier to keep an existing customer than to find a new one. And yes, a bird in hand is worth two in the bush.
So it stands to reason that marketing to current customers -- to expand the relationship, to ensure customer loyalty -- can be critical to sales success. In fact, Gartner's research shows that technology companies and service providers can increase revenue by as much as 20 percent by taking a systematic approach to marketing to their own existing customers.
Although this particular bit of Gartner research focuses on technology and service providers, marketing to existing customers is just as important for other businesses, as well. It's really just common sense -- Marketing 101.
And yet, many businesses treat customer loyalty and customer experience management (CEM) as the responsibility of the sales and service teams, not the marketing department. While sales and service reps have a customer-facing role, marketing staffers behind the scenes also need to take a serious interest in building customer relationships, assessing customer needs, and optimizing customer engagement to maximize long-term profitability.
Advanced Relationship Building
"Study after study shows that it's easier and cheaper to sell to existing customers than to try to acquire new ones, and loyal, happy customers are key to influencing [new] prospects," Berkowitz writes. That's why marketers need to be "completely engaged" in marketing to their company's own customer base.
Account managers or 'farmers' -- the salespeople looking for new sales leads -- can often do a great job with customer relationship management (CRM) and account maintenance, following through with leads in their CRM database.
However, Berkowitz points out, "they are neither marketers nor product experts. And that’s a problem because customers don’t just want access to support or basic account management." They may also want "tailored offers, white papers, and other things that should be coming from product marketing and management, rather than [from] sales."
A Four-Step Approach
Gartner's research reveals that a significant number of the 503 buyers of B2B technology and services that it surveyed view marketing as "extremely significant" in terms of building the relationship. And, in turn, building the relationship drives the likelihood of existing customers buying more in the future.
Of course, the company isn’t suggesting diving in without thought. Gartner recommends a programmatic approach and offers four steps: (1) agree on marketing’s role and objectives; (2) collect, consolidate and correlate data to uncover hidden opportunities; (3) map content and activities to the customer’s buying journey; and (4) enable the field and partners for selling to existing customers.
In addition, Gartner recommends viewing the customer base as an asset that needs to be protected and nurtured continuously to optimize value. Businesses need to apply the same rigor and effort toward expanding relationships with current customers as they do with cultivating new prospects.
Vendors, Know Thy Customers
We caught up with Rob Enderle, principal analyst at the Enderle Group, for his thoughts on the Gartner theories.
He expanded on the notion that vendors need to know their customers well enough to be able to ensure ongoing loyalty and keep them satisfied for the long haul.
As far as strategies to accomplish those goals, Enderle touched on the importance of using more sophisticated analytics. For example, he explained, some technology companies like EMC and HP are using NPS (Net Promoter Score) programs to granularly determine what customers want, "so they can, in a more granular fashion, provide it."
In this case, Enderle agrees with Gartner's basic, top-level conclusion -- that businesses need to actively market to their own customers. That's "well proven and accurate" -- essentially just common sense, and not something that requires major analysis, by any means.
What's also key, he points out, is the importance of using analytics to interpret customer data, buying patterns, and trends. The advanced analytics tools on the market today can help businesses "attack the problem with much finer control" than was possible a decade ago.
Take It to the Bank
The bottom line for marketing managers: Don't get so caught up in generating new prospects for the sales team that you inadvertently forget to market to your best prospects -- all those customers already in your CRM database.
Yes, your customers are your target market. They're the best pre-qualified leads your sales team could ever hope to find.
So, don't just leave it to chance that your sales reps will be able to keep them happy. Ask for customer feedback. Assess their needs. Analyze their buying patterns. Encourage customer engagement. Focus on customer experience and customer satisfaction. In the end, you'll build customer loyalty that keeps 'em coming back for more.