From attracting new business to maximising customer retention, knowing your customers is a crucial aspect of your business’s success.
Whether you are marketing for a start-up company or a large corporation, customer-centric marketing is a vital component of building long-term loyal customers.
However, the real question is, how do you get to know your customers and why is it so important? We explore this very thing, so keep on reading to find out.
What is customer marketing?
Customer marketing is a marketing strategy focusing on a business’s current customers rather than new customer prospects. While customer marketing aims at retaining your existing customers, it also helps you understand why these customers chose your business. This can be very useful when attracting new clientele.
By knowing exactly who your actual target audience is — not just who you believe it is — you can focus your marketing efforts on the platforms your customers prefer, the language that appeals to them and more.
In the long run, it will help you retain more customers, receive a better return on investment and save time by avoiding what doesn’t work for your business.
3 Reasons Why Customer Marketing is Important
Asking why customer marketing is important is similar to asking why customer retention is important.
Customer marketing aims to support brand loyalty and retention, which are integral to running a successful business. Customers who are loyal to your business are more likely to leave positive reviews, provide referrals and interact with your social media accounts. So, how do you support customer marketing?
According to Microsoft’s State of Global Customer Service Report, 96% of global respondents agree good customer service plays a role in their loyalty and choice of a particular brand. The direct correlation between brand loyalty and exceptional customer service allows your business to be the key component in a successful retention strategy.
Among millennials, 74% agree social media responsiveness on apps such as Facebook and Instagram has a positive impact on brand perception. An additional 79% of millennial respondents favour brands offering mobile-responsive customer support.
But why is focusing on customer marketing truly worth it for your business?
1. The acquisition of new customers is expensive.
As opposed to targeting new customers, enticing existing customers to make repeat purchases will continuously result in a greater return on investment (ROI). Plus, the cost of keeping an existing customer is far less than the acquisition of new customers.
2. Getting new customers on board is the hard part.
The hard work has paid off, sales are increasing, and it’s time to focus on creating a long-term, meaningful relationship with your clients.
Engaged customers generate revenue by returning for repeat purchases and increasing brand awareness, either through social media engagement or word-of-mouth marketing. So, not only are they easier to convince to re-use your services or buy your products again, they help convince others to do the same.
3. The value of customer retention.
Existing customers are not only more inclined to spend more on a particular product or service, but they are also more likely to recommend the product or service to new potential customers.
Recent data reveals over a span of three years, your loyal customers are expected to spend 67% more than they would in the first six months of the relationship with the customer. *
How to Calculate your Customer Retention Rate
The first step in improving customer retention is to determine your current customer retention rate (CRR):
((CE – CN) / CS) * 100
- Begin with the total number of customers at the end of a time period (CE).
- Subtract the total number of new customers within the time period (CN).
- Divide that number by the number of existing customers at the beginning of the time period (CS).
- Multiply by 100.
There is no definitive indicator of a good or bad retention rate as all industries are different. In a perfect world, a 100% retention rate would be ideal. However, a 100% retention rate would mean you did not lose a single customer, which is not an easy achievement for any business.
Depending again on the industry, small to medium businesses should aim for around an 85% average retention rate for customers.
What is a customer marketing strategy?
Simply put, a customer marketing strategy targets your existing customers, promoting advocacy, growth and a sense of community within your brand.
The 80/20 rule — also known as the ‘Pareto Principle’ — can be applied to your customer marketing strategies.
The rule implies that 80% of consequences come from 20% of the causes. In other words, 80% of revenue is generated from 20% of customers. The majority of your sales will be from a small percentage of long-term customers.
The current customer base makes up a small group of your core customers. These customers are the ones who will contribute to the majority of your business’s growth and success.
A customer marketing strategy is designed specifically to target those who are already satisfied with your product or service and the customer base who are most likely to recommend your brand to friends and family.
How to Create the Perfect Customer Marketing Strategy
Collect Customer Feedback
One of the most important ways to retain customers is to understand everything your customer likes and doesn’t like about your product or service. Customer feedback is a powerful tool needed to tailor your marketing campaign towards meeting customer needs.
A customer satisfaction survey is a perfect way to gather data about how your customers respond to your business, whether you create a candid social media poll or an in-depth physical feedback form.
The knowledge feedback allows for a targeted approach to your customer marketing strategies. For example, let’s say you own a plumbing service and you get a lot of feedback saying customers would like the ability to book online.
You can now add this feature to your website and market your new online booking system — it is highly likely your marketing will prove successful as online booking is clearly important to your customers. Without collecting customer feedback, you may have not become aware of this opportunity.
Generate Online Reviews
Online reviews give your customers the power to share their side of the buying story. 93% of consumers agree online reviews influenced their purchase decision. A further 91% of 18–34-year-olds trust online reviews just as much as personal recommendations.
Whether the reviews are good or bad, the ability for your customer to leave a review about your brand builds trust between you and the customer.
Think of it as social proof that makes your business more visible. A Harvard Business School study uncovered if your business were to receive multiple positive reviews, you can consequently expect growth in revenue.
Reward your Customer Base
Everybody loves freebies, one of the better word-of-mouth marketing strategies for your business. Whether it’s a discount offer or a personalised vote of thanks, rewarding your customer for their dedication to your brand leaves them feeling valued and could encourage further support.
Why should you implement a customer marketing strategy?
Whilst this is fairly obvious, it’s often overlooked. Asking yourself why you want to increase customer satisfaction and why you want to focus on customer marketing is important.
Understanding why your customers are choosing your business is imperative in understanding how to retain customer satisfaction.
Knowing the “why” will separate you from your competitors. Coming from a place of meaning and purpose will drive your marketing efforts toward who your customers are and what you can offer them.
How to Implement Customer Marketing Strategies
The secret here is to really know your customer.
Find out who your customers are.
There is more to your customers than you think. There are buyers, impulse buyers, wanderers, researchers, users, bargain hunters, loyal customers — the list is endless.
Knowing exactly who is buying your product or service allows you to create the perfect customer marketing strategy to target your ideal customer. Finding out more about your customer may not be as complicated as you think. Start by looking at your purchasing analytics, social analytics and website stats. From here you should be able to draw some conclusions and start shaping your customers.
Some of the things you may wish to look for are:
- Most popular products or services.
- Common requests, complaints and compliments. This will help you determine what is important to your customer. For example, if they wish for an online booking system, they may be hard-pressed for time.
- General demographics, such as age, gender and location.
Know what makes your business different.
Consider your business as a whole and identify your business’s core values, beliefs and company culture. Think about what sets your business apart from your competitors.
Do you offer 24/7 service? Do you have the latest technology? Whatever it may be, it is important to understand why this sets you above the rest.
This reflection is important as you want to be able to tailor your content to appeal towards your target customer whilst upholding your company image.
Learn when you should implement certain strategies.
The timing of releasing content is a critical component of the overall strategy, whether it’s daily, weekly or monthly. A routine in the release of your blog and social media content is crucial to the success of the marketing strategy.
With blog posts, more is almost always better. The frequency of blog posts is dependent on the purpose of your blog.
When posting blog content to increase brand awareness, 2 to 3 posts per week is ideal. If your blog content aims at increasing organic traffic, 1 to 2 posts per week would be a better target. If you are unable to post so frequently, that’s okay! Just remember the more blog posts, the better.
Social media content is a little different. You want to post enough to keep consumers engaged, whilst not posting too often to be a nuisance.
It’s recommended to post on Facebook once per day, or at least three days per week as a bare minimum. For Pinterest, it is recommended a minimum of three pins per day, with a maximum of 30 pins a day. Finally, for Instagram, it is recommended to post at least one story daily and at least one Instagram post every three days.
As for the best time to post there is no straight answer, but your analytics can give you insight into when people are visiting or engaging with your content the most.
Know where you should publish your content.
Blogging is a great place to start when deciding where to post online. It not only increases traffic to your website (when done right) but it also helps promote trust in your business by providing the solution to a problem or query.
It is common for companies to repurpose their blog content for their social media content. Depending on the blog, you may even get several posts per platform per blog. For instance, with this blog, we may post the separate stats as posts, the tips as another and a general introduction to the blog in another. That’s 5+ posts from one blog.
As for your social media content, you want to be posting across all platforms. Facebook, Instagram and LinkedIn are an absolute must. If there are any other platforms your customers are frequently on, it’s important to look into those also.
Know how you want your customers to engage with you.
In a perfect world, you want your customers to call your office, sign-up for your website newsletters and engage with all of your social media content.
Knowing exactly how you want your customers to engage with your brand allows for targeting marketing efforts to support your marketing success.
As a general rule, engage with your customers exactly how you want them to engage with you.
What is customer-centric marketing?
Customer-centric marketing is a type of customer marketing that goes beyond traditional marketing. With an emphasis on quality over quantity, a successful customer-centric marketing campaign aims at strengthening customer relationships and their lifetime value, whilst also attracting new business.
Customer Lifetime Value
A customer lifetime value is a measure of the average revenue a customer generates over their predicted lifespan with a particular company.
How do you measure CLV?
The simple way to calculate your Customer Lifetime Value (CLV):
CLV = average purchase value * number of yearly purchases (per customer) * average length of the customer relationship (years)
Let’s say a person visits a dentist for a clean twice a year valued at $100 each. Over three years the patient’s CLV is worth $600.
CLV = $100 * 2 (yearly purchases) * 3 (years) = $600
Let’s look at another dentist patient who seems to need one filling a year (valued at $150). Over three years, the patient’s CLV is worth $400.
CLV = $150 * 1 (yearly Cleans) * 3 (years) = $450
The patient who attends the dental clinic for regular cleans has a higher customer lifetime value than the patient who only comes in for a filling once a year.
Why is customer-centric marketing important?
The objective of CLV is to identify which of your customers are contributing the most to your overall revenue. The service towards your high-value existing customers will support their tendency to return to your business more than once.
It helps you target your ideal customers.
After you determine which of your customers are spending the most, it’s now clear who the people are that are most likely to choose your business. Regardless of the amount they spend, the knowledge of your most valuable customers will help with your acquisition strategy to attract like-minded customers in the future.
It lowers the cost of acquiring new customers.
The acquisition of new customers is a costly affair. Trying to convince a potential customer to choose your business can be difficult in the current hyper-competitive environment.
Particularly in recent times, consumers have become increasingly numb to digital ads. Did you know the average person is estimated to encounter between 6,000 and 10,000 digital ads per day?
Allows for relevant content creation.
We all know creating content can be tedious at times. However, your satisfied customers are more likely to create user-generated content. Not only do you have on the costs of creating content, but user-generated content has also proven more effective.
In comparison with brand-created content, user-generated content creates a sense of authenticity. Authenticity helps build consumers’ trust, boosting your brand’s credibility.
It is important to mention you should always request permission from the user before sharing content generated by the consumer.
Builds advocacy for your brand.
Word-of-mouth marketing is arguably the most effective form of marketing. It is essentially free advertising endorsed by customer experiences. 92% of consumers are inclined to trust suggestions from friends and family more than any efforts of conventional advertising.
Tips for Implement Word-of-Mouth Marketing
Create an experience.
Let’s shy away from the idea of people telling their friends and family about your business. We need to focus on specific strategies that encourage people to refer.
There are two ends of the spectrum; people sharing things they love and people sharing things they dislike.
Many businesses lack the ‘x-factor’ when it comes to customer experience. It’s important to create something buzz-worthy, something people get excited about and want to share.
Build a community, not a commodity.
A successful word-of-mouth (WOM) advertising strategy relies on genuine and meaningful engagement with customers.
If your customers engage with you via social media, make an effort to reply as soon as possible. A prospective customer who reaches out to you for support and doesn’t get a prompt reply is more likely to move to one of your competitors.
Create something unique.
It’s time to really think outside of the box. Something a little quirky and different could trigger people into spreading the word about your business.
It is common for companies to get caught up in flooding their audience with content solely aimed at increasing sales. Put your thinking cap on and create some new content promoting community engagement.
Create a hashtag campaign.
Creating a hashtag campaign is one of the most common, yet most effective tips for creating a low-budget (even zero-budget) word-of-mouth marketing campaign. This cost-effective method of community engagement is the perfect way for people to spread the word about your business. A perfect example of this is Coca-Cola’s #ShareaCoke campaign.
The goal of the campaign was to create a personal relationship with Coca-Cola consumers and inspire shared moments of happiness.
A recent survey concluded that Instagram and Twitter hashtags improve overall engagement by 100%, for brands it’s a 55% increase when used efficiently.
Is your mind brimming with ideas but you don’t have to time to execute a customer-focused campaign?
This is where Localsearch can help. Whatever platform you want to use to reach new or existing customers, we can help make it damn easy.
Request a free business needs analysis to find out more.