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Customer Marketing is by far my favorite B2B marketing strategy. But sadly, it’s also the most overlooked by most marketing professionals!

I have yet to walk into a company that had a proactive strategy for customer marketing. And it’s by far the most profitable of all marketing strategies. If you have very little budget set aside for marketing, it’s what you need to do before anything else.

The reason customer marketing is so overlooked is the ongoing chase for new growth through new names, new leads, and new logos. Everything has to be new, new, new.

Here are some stats to underscore this.

  • 44% of companies focus on customer acquisition, while only 18% focus on customer retention. That’s backwards!
  • Getting a new customer is 5 times more expensive than retaining an existing one. And some say this is as high as 25 times more expensive. That’s a big number!
  • The chance of selling to a new prospect is only 5% to 20% on average, while the chance of selling to a customer is 60% to 70%!
  • Increasing customer retention by just 5% increases company profit by 25% to 95%. It’s shocking, really. Source: Invesp

What is customer marketing?

Everybody has a different definition for customer marketing. Here’s what I include:

  1. Retaining your customers, which is the most profitable thing that you can do. If you don’t lose new customers, you don’t have to replace them with new ones that cost 5 to 20 times as much.
  2. Upselling. You have a very high probability of upselling an existing customer versus getting a brand new customer.
  3. Generating customer referrals. Customer referrals are by far the best leads you’ll ever get.

1. Customer Retention

Let’s talk about the first bucket: customer retention. Here are a few things you can do to retain customers.

customer retention
  • Renewal campaigns, especially if you’re a product company. If you’re services company, it’s a little different. But services usually have a beginning and an end. Especially when it’s project work. So, a campaign to renew customers and knowing when’s the right time to ask for the renewal is critical.
  • Community development. This is a big one, especially for product companies. Building a community of people who can share ideas about how they’re using your product and the features they’re using. When I’m a part of a community I’m always surprised to hear somebody say, “I’m using this product to do this.” And someone else says, “Really? I’ve never tried that.” And they tell them how to do it and it instantly adds value. And before you know it, that customer is using a higher percentage of your product, which is one of the keys to customer retention.
  • Loyalty programs. When I think of loyalty programs, I think of B2C marketing, where someone might be marketing a credit card or cell service, or something like that. But loyalty programs have a big place in B2B marketing because incentives can include anything from discounts to upgraded service. You can also offer VIP access to certain types of product features or additional resources.
  • My favorite customer retention activity is product education. Again, this is primarily for product companies. I heard a statistic that people using software only use about 5% to 10% of available features. This is amazing, because the product company puts so much effort into designing the other 90%! Unfortunately, customers who are only using 5% of your features will not be customers for long. Fixing this starts with customer onboarding. That’s the most important part, so you can shorten “time to value” to deliver value as quickly as possible.
  • Another big one is an NPS (Net Promoter Score) survey. A lot of you are familiar with this because two-thirds of US companies are using NPS surveys on a regular basis. And if you’re not familiar with the what this is, it’s a survey that you send out regularly, maybe twice a year. You ask customers if they would recommend your product or service to someone else.

The higher the score they give you, the more likely they’re a happy customer. If they give you a 9 or 10 on that 10-point scale, then they’re a happy customer. If it’s below that, then they’re not happy.

Researchers have found this is the best way to find out if your customers are truly happy.

The reason why I bring it up for customer retention is it’s critical to know whether your customer is happy before you ask for a referral or try to upsell them. And it’s also critical to know early whether customers are unhappy so you can address it quickly.

Most customers will leave you quietly if they’re not happy. Of course, everyone has the loud, obnoxious customers who complain all the time, by they’re in the minority. Usually, they’re the ones who will stick around because they want to make it work. It’s the ones who don’t complain and are unhappy that you have to worry about.

2. Customer Referrals

Going back to the NPS score, if you know they’re unhappy, then you can take action. And usually, it’s like a canary in a coal mine. It’s an early warning system that tells you whether you’re going to lose a customer.

And it also tells you when to ask for referrals. That’s the important part here. If the customer is not happy, you don’t ask for referrals. It’s that simple. All your customers through their entire customer life cycles will go back and forth between happy and unhappy. A very few will always be happy. So you always need to ask at the right time.

customer referrals

There are two different types of referrals to consider:

  • There’s an external referral where someone refers you to someone at another company who may also need your product or service.
  • And there’s the internal referral. That could be someone in a different division, different group, or different department. I’ve seen some amazing things happen in this area where one of our salespeople software to a small part of a really big company. And within 2 years they had sold into 17 different groups in that company, and it was 10 times the revenue! You might call this a “land and expand” strategy where you get your foot in the door, deliver a great product, and grow the account.

The biggest roadblock to getting referrals is not asking for referrals. For some reason we, as humans, have a hard time asking for them.

To get that question asked on a consistent basis, there needs to be incentives to your team. Of course, there needs to be education about how to ask and when to ask, but incentives will accelerate it rapidly.

Incentive for customers is another matter. Some companies just can’t take any kind of incentives, but you could offer discounts or upgraded services. Another option is donating to a charity in their name.

3. Upselling Customers

There are 3 different types of upselling.

  • You have traditional upselling, which is trying to get someone to buy more of the same product they’re already buying.
  • Cross selling is selling different types of products related to what they’re already buying.
  • Account expansion is selling to different people or different departments within the same company.

Exclusive offers are very effective for upselling. The thing that annoys me is when you’re a customer, but brand-new customers are getting discounts and paying less than what you are. That is crazy thinking. The key is to reward your loyal customers more than your prospects.

The big challenge in upselling is actually finding opportunities. If a salesperson hears about an opportunity, they usually have a finely-tuned radar that detects opportunities and pursues them aggressively.

Unlike salespeople, I’ve found that other employees on the front lines, like customer service, account managers, and customer success manager might hear an opportunity and say, oh, we should be able to do that for them. But they don’t escalate it rapidly, or they don’t take it to a salesperson, or they don’t just sell it themselves.

So, it’s extremely important to make sure your people understand the vital importance of recognizing opportunities and acting on them. That’s the lifeblood of growing an account.

Quick start: Marketing to Customers

Those are a lot of things I’ve shared with you and it might be a little overwhelming and hard to know where to start.

I’ll boil it down into a few steps that you can start on today.

  1. You have to have an NPS survey that you’re using on a regular basis, because that feeds into all the other things that I just talked about. It tells you when is the right time to upsell, ask for a referral, etc.
  2. You need a customer education program. This is obvious for product companies because an educated customer is much more likely to stick around. Uneducated customers don’t.
  3. Internal incentives for referrals. It just doesn’t happen fast enough without incentive, even for salespeople.

The key thing to remember

Remember, when you’re trying to get internal buy-in for a customer marketing program, customer marketing is only 5% to 20% of the cost of getting new customers! That’s such a small investment that it makes customer marketing everyone’s priority.

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About the Author:

Gordon Johnson has been a marketing leader in the corporate L&D industry for over twenty years. His specialty is developing transformative marketing strategies that generate qualified sales opportunities, employing the latest digital marketing channels, coupled with traditional techniques to achieve industry-leading brand awareness, widespread web presence and high-impact value propositions. Other marketing concentrations include content marketing, messaging, social marketing, positioning strategy, analyst relations, events, account-based marketing (ABM), email marketing, customer success and lead-generation. Contact Gordon at FlashWorks Marketing.