According to Forrester Research, it costs five times more to acquire new customers than it does to keep current ones.
And yet, many businesses today are still focused on driving leads and getting new contracts as opposed to ensuring customer satisfaction and potentially renewing and expanding current customer relationships.
It seems counterintuitive when you think about it—customers choose to do business with you based on past experiences, the experiences of others, your products and/or services, and pricing. So if you don’t provide a great customer experience, you won’t be referred business and customers won’t come back to you. All you’ll have left is your product and services, and pricing. And let’s be honest—even if a product is great and pricing seems perfect, if it has a bad review, we think twice before making a purchase.
So how can organizations have it all? The leads, the customers, the experience that keeps them coming back for more… how can organizations drive this behavior and grow their business in return?
More Than Acquisition
Consider this example: A marketing director for a large company is evaluated on her team’s ability to convert leads. Each month, she presents to the management team how much money has been spent on TV, print, and digital advertising. She then reports the cost per lead (CPL) for each medium, which medium converts best, and the anticipated return on investment (ROI) for each medium.
For whatever reason, a converted lead to this company is someone who simply indicates that they’re interested.
If you're a seasoned marketer, you've probably already spotted the red flag. Interested?! How about being evaluated on the leads who actually make a purchase? Doesn’t that make more sense?
By taking a deeper dive into the numbers, the marketing team in this scenario realizes that they are spending up to nine times the amount they initially reported to management to move someone from the “interested” stage to the “new customer” stage. What they had previously been reporting was the cost of identifying potential customers.
This discovery has made a major impact on their budget and revealed the company was spending way too much money to reach prospective customers. Thankfully, it also caused management to consider what was happening to the folks who had already bought from them. Were they repeat customers? Was the company doing anything to keep them engaged?
Customer Retention and Satisfaction
Keeping customers and keeping customers happy go hand-in-hand. Unfortunately, as Forrester Principal Analyst Kate Leggett indicates in her report, Navigate the Future of Customer Service in 2014, customers are becoming increasingly dissatisfied because organizations are often delivering:
- Inconsistent cross-channel experiences
- Reactive (not proactive) customer service
- One-size-fits-all customer engagement processes
- Inefficient agent interactions
All of these negative experiences can be prevented if serious consideration is given to your customer’s lifecycle with your brand.
For example, the information a new customer requires is quite different from the information a “regular” customer expects. They are in different stages of their relationship with your brand, meaning they should be treated differently and appropriately.
Creating Customers for Life
It all starts with a positive experience, but if you want to create a customer for life, the experience needs to expand to include interactions with well-trained customer service agents and personalized customer engagement.
What’s key is the personalized customer engagement—this doesn’t mean simply using their first name in email subject lines. With personalized customer engagement, companies can create marketing campaigns that initiate as soon as a lead becomes a customer or a one-time customer becomes a loyal advocate. From that point, marketing can consistently stay in front of the customer with product information and updates, tips and tricks, company news, and more, maximizing customer relationships while increasing lifetime value.
As illustrated in the earlier example of the company evaluating marketing success by the average CPL and number of “conversions”, you can’t find best-fit customers. You have to nurture them. By tracking customers as they take their own complicated and sometimes drawn-out journey with your brand, you can provide them with the content they need, when they need it most.
Lifecycle marketing helps brands provide relevant and timely information to customers in the way they want to receive it throughout their relationship with a brand. Brands can build trust with their customers and over time, form relationships. It’s these engaged relationships that increase revenue, not the high CPLs marketing has to wrangle day in and day out.
The game has changed.