We have the first 10 days of the new year behind us, email boxes cleaned out from the holidays and should be looking ahead to starting the year with a good first quarter and build up of first half momentum to meet annual targets for profitable revenue growth. Marketers must focus on many priorities – build the brand, develop new solution offerings and line extensions, continually infuse the “voice of the customer” into developing market strategies and positioning, etc. – but the top priority on any list has to be focusing on acquiring new customers while retaining and growing revenue from the current customer base.
Achieve the right balance in your marketing for new customer acquisition and current client retention, resulting in increases in revenue, profitability and customer satisfaction, by following these five key steps:
Targeting – The first step focuses on “the who” for both current customers and new customers/segments to target. Marketing needs to take ownership of identifying the highest potential customers for both revenue growth and margin enhancement by conducting analysis of the current customer database by revenue, product, profitability, region, and channel; market segmentation research focusing on prospective customer targets; and thoughtful construction of go-to-market programs, messages and promotions. The target database to drive this investment in marketing to the right targets is what will yield the best Lifetime Customer Value. Ensuring your teams don’t rush past the “who” to the “what” is imperative in ensuring you have most effectively allocated your time and budget resources to capturing the right business.
Retention – Most marketing teams don’t spend enough time on programs to retain customers and expand their usage of company solution offerings. While there is indeed pressure from sales and leadership teams to invest mostly in new customer acquisition, the reality is you must fight to maintain a more balanced view of keeping the customers you already have while adding new ones to the company roster. In addition to reducing churn and improving customer satisfaction, use an on-going dialogue with your customers via formal and informal research channels (focus groups, internet and mobile surveys, engagement via social media networks, customer user groups, etc.) to gain the insights you need for understanding what they’re saying about your product or service, how they’re using it and how they believe it can be improved. This insight is an invaluable tool to use when developing your strategies for up-selling or cross-selling existing or new products. This attention to retaining and growing margin from current customers improves your Lifetime Customer Value and benefits you in the new customer acquisition mode due to the ability to leverage a positive customer base in testimonials.
Acquisition – Whether your company is marketing to consumers, large enterprise or small business customer segments ( or some combination), ensure your marketing strategy and teams are clear about what the “net new” customer acquisition goals are by customer segment, product/service line and geography. Additionally, assuming you’ve spent the necessary time on targeting and segmentation upfront to drive your marketing plan using facts, successful teams are also optimizing the mix of what channels they plan to use to reach prospective customers where and how they want to be reached. This includes looking at the mix of online/offline channels, direct/indirect channels, what social media networks each prospect segment uses, etc. With the right understanding of the goals and marketing mix, you should establish up front what the goals are for revenue and profit expected per customer and the expected cost-per-acquisition targets so that you have a way to measure the effectiveness of your programs and assumptions.
Engagement & Activation – Integration of marketing tactics, channels and programs is never out of style. In both your retention and acquisition programs, ensure your engagement and activation efforts leverage the right mix and integration of all facets of marketing – effectively making every dollar spent work like five dollars – including web/online marketing, social media, email marketing, search engine optimization and marketing, online/offline direct marketing, advertising, PR, alliances and channel marketing to name a few. Equally important is to ensure you are engaging with internal colleagues who become critical brand ambassadors throughout your organization at each customer and prospect touch point.
Measurement – Last and certainly not least, is measurement. I’ve written in past blog entries about the importance of measuring your marketing efforts and spend against goals that are agreed upon UPFRONT by your other cross-functional management team colleagues. Not every marketing program and effort is going to yield the results you expect – but what are the results you expect? It’s not unreasonable to attempt to have a measurement component built into every program at its inception. Metrics for measuring results can include specific retention measures; impact on lifetime customer value; growth in revenue, profits and market share; cost-per-acquisition; and number of new customers added and current customers retained. Every program should also include an ROI measure by product, channel and customer segment.
