April 17, 2014

Market To Previous Customers Or Pay The Price

Previous customers are may be the most overlooked and undervalued of all lead sources. This much can easily be proven simply by reviewing the number of companies offering customer acquisition versus the number which offer customer retention and relationship development. But placing your primary marketing focus on acquiring new customers is nothing more than a way to spend more money and effort accomplishing something that should cost far less and be far easier. Savvy marketers look to deepen their relationships with previous and existing customers, and reap benefits that would make other marketers jealous.

Previous Customers are taken for Granted

Suppose you are marketing an informational e-book. Do you suppose that the bulk of your marketing budget should go towards seeking new customers, or marketing to those who have already purchased from you in the past? Many marketers would do little more than send the previous customers a set of canned email solicitations, announcing the new product. This is a practically free method of marketing which treats previous customers almost as an afterthought. Meanwhile, much of the marketing budget will be dedicated to PPC, Facebook, display ads, and other means of marketing which primarily target new customers.

Missed Opportunity

The above example represents and enormous error, and missed opportunity. According to a study by Bain & Capital, acquiring a new customer is six or seven times more expensive than selling to a previous customer. This means, all things being equal, your investment can do up to seven times the work if directed at pervious customers as opposed to new customers. Of course, this advice pertains more to those who already have a sizeable database of existing and previous customers. New marketers have little choice but to build up a list of satisfied customers, and can steadily allocate more of their marketing budgets to previous customers as they go.

Focus First on Customer Experience

Offering superior service is essential in laying the foundation for sales down the road. A recent study found that 62 percent of customers across the globe switched from one company to a competitor due to poor customer service. If you do not offer outstanding service your company will be in that 62 percent. Online performance marketers can use the checkout process to further help ensure that first time customers will return. For example, the customers could be offered the opportunity to check a box and be among the first to be notified about new products or services before the general public, or even offered a “no expiration” discount coupon as a gift for making their first purchase.

Believe in Your Offering

Many marketers fail to adequately target previous customers because they, the marketers, do not truly appreciate the product or service they are offering. Imagine a Lamborghini salesman. He or she would certainly contact a definite list of previous customers every time a new model is announced because he knows that his customers truly value his offering. He does not hesitate to make the call, and in fact sees himself as doing the previous customers a favor by allowing them to place an order before everyone else. High end sports car sales may seem like an extreme example, but it really is appropriate. You must be every bit as convinced of the quality and utility of your product or service as a high end sports car salesperson is about his. If you aren’t, you won’t market to previous customers because you will have considered yourself lucky that they bought from you in the first place.