Showing posts with label customer loyalty. Show all posts
Showing posts with label customer loyalty. Show all posts

Marketing Trends That Matter for Every Business

Seems that every conversation about marketing these days somehow raises interest in “what are the big trends in marketing?” and “what’s hot in marketing?”.  While some so-called trends may be fleeting, there are a number of recent and future trends that have or will change what and how we do marketing.

Here’s a list in no particular priority or sequence of the more frequent marketing activities and trends encountered on a daily basis:

Social Media – no question that social media has a huge impact on marketing and will continue to be one of the most prevalent trends in marketing for the foreseeable future.

Marketing Automation – there is growing interest and use of marketing automation software to plan, manage, execute and track marketing campaigns in a more structured, integrated and consistent manner.

Sales 2.0 – although there are many interpretations of what Sales 2.0 means, the primary aspects of this trend are the convergence of sales, marketing and customer collaboration using internet-based technologies and tools for improved performance.

– internet-based technologies, automation systems and database capabilities have vastly improved the availability of relevant and accurate data for analysis, performance measurement and management to improve the efficiency and effectiveness of marketing.

Metrics – there has been an explosive increase in the definition and use of standardized marketing metrics over the past several years to measure marketing performance and results in a consistent and comparable manner.

– while still a nascent trend and technology, location-based media and marketing to deliver relevant content specific to a user / customer / buyer’s location will become an increasingly important and effective approach for reaching target audiences.

Mobile – mobile technologies continue to play a more prevalent role in everyone’s personal and business life.  As mobile capabilities continue to improve and evolve, and usage increases, marketing must reach their target audiences through mobile technologies.

Inbound Marketing
– the trend from traditional ‘push’ style outbound marketing approaches such as print advertising, direct mail, trade shows, email blasts, etc. continues to shift to more effective and measurable ‘pull’ style inbound marketing methods such as search, websites, content, social media, etc.

Content – buyers and customers want information and resources to make informed buying decisions.  Content marketing uses educational, informative and authoritative content delivered in multiple media formats such websites, newsletters, white papers, articles, videos, etc. for specific target audiences.

– is one of the most important tools and resources for marketers across all types of businesses.  Search Engine Marketing (SEM) has become a sophisticated marketing strategy encompassing both Organic Search Engine Optimization (SEO) and Paid Placement methods.

Integrated Marketing – persistent campaigns and consistent messaging across multiple channels such as websites, video, online and other media advertising, content and collateral.

Adaptive Brand Marketing – the shift from traditional command-and-control and/or hub-and-spoke approaches to collaborative approaches that include new technologies and social media.  See article ‘Adaptive Brand Marketing – More Than Just Four New Ps’ for more information.

Customer Loyalty – means that a customer desires to continue doing business with a company based on their positive experience and satisfaction.  Marketing is increasingly charged with measuring and improving customer loyalty, providing loyalty programs, and driving customer-specific campaigns to get more sales from existing customers.

– traditionally marketing primarily used demographics to define market and customer segmentation based on tangible characteristics.  The use of psychographics to define target audiences and market segments based on aspirational, opinions and value characteristics enables improved targeting and more relevant messaging.

What do you think about this list and what you’re seeing and experiencing?  Your comments are always welcome.
Copyright © 2010 The Marketing Mélange and Ingistics LLC.

Relationship vs. Transactional Marketing

During heady boom periods companies focus a lot of marketing activity on traditional transactional marketing processes to find and close individual deals or transactions. Demand is good, buyers have budgets, vendors are busy and there are lots of potential deals to pursue. Transactional marketing as the name implies is about each party maximizing the return on individual transactions. It’s about immediate value delivery and short-term revenue generation. For IT companies, transactional marketing typically focuses on acquiring new customers and gaining market share.

But as we all painfully know, economic cycles go up and down with boom periods giving way to slow periods. Transactional marketing doesn’t work well during slow periods because demand decreases significantly, spending is restrained and there are fewer new transactions to be had. Some companies continue pursuing a transactional marketing approach during slow times by using special promotions, discounting, and other tactics to keep new transactions flowing. Besides being ineffective, these short-term tactics create longer-term detrimental consequences.

Relationship marketing on the other hand focuses on long-term customer loyalty, retention and satisfaction to generate a continuing revenue stream from existing customers. The “relationship” is not about some cozy, kumbaya intimate friendship with a customer. Relationship Marketing is about a continuing mutually beneficial business relationship process that encompasses the entire customer life-cycle.

Relationship marketing continues whether or not a customer intends to buy this quarter or whenever. Although relationship marketing should be a cornerstone of B2B marketing strategy, many companies have recently found new religion in relationship marketing during the economic slowdown.

Relationship marketing is ultimately about generating additional revenue from existing customers using appropriate retention and loyalty methods. The key to successful relationship marketing is to tune your retention, loyalty and marketing activities to relevant and prevailing circumstances:

  • Listening to customers or market segments of customers – they’ll communicate their circumstances, needs and buying intentions.
  • Customer life cycle – what’s going on in their business, when last did they buy, what did they buy? Either individually for large customers or in groups with similar characteristics.
  • Customer events – capitalize on major events such as acquisitions, management changes, new product introduction, etc.
  • Customer demographics – such as larger versus smaller companies, owner operated versus corporate management, etc.
  • Industry – yours and your customer’s. Each industry has its own economic cycle and specific conditions.
  • Monitor customer service / support activities for trends in issues and complaints to identify threats and opportunities.
  • Improve your Net Promoter Score
  • Even though your focus is on retention and loyalty, always provide meaningful value that customers appreciate during the process.

“The aim of marketing is to know and understand the customer so well the product or service fits him and sells itself.” – Peter Drucker

I’ve seen several recent articles positing that the current slower market conditions for IT vendors may continue long after the recession is over due to a fundamental shift in the market, demand and buying motivations. Relationship marketing is the best approach to combat the vagaries of the economy and business cycles over the long term.

The basic premise of relationship marketing is to stay engaged with customers and keep them long enough to buy more stuff from you.

How does your company use relationship marketing? Your comments are always welcome.
Copyright © 2009 The Marketing Mélange and Ingistics LLC.

Why you should know your Net Promoter Score

Continuing the discussion about Customer Loyalty; a common question is how to measure customer loyalty. Measuring customer loyalty should provide:

  • An objective and consistent measurement
  • A measurement that is easy to understand and provides a common goal across business areas
  • A means to interpret results for improving customer loyalty
  • A means to benchmark your performance with your industry and competitors.
Based on previous experience, the Net Promoter Score® (NPS) is a good approach for measuring customer loyalty. NPS was originally introduced by Fred Reichheld in his 2003 Harvard Business Review article "The One Number You Need to Grow" and his book “The Ultimate Question: Driving Good Profits and True Growth”. It was subsequently developed by Reichheld, Bain & Company, and Satmetrix who hold the registered trade marks for Net Promoter, NPS, and Net Promoter Score.

Determining your Net Promoter Score is relatively straightforward:
  • Ask your customers one question – “How likely is it that you would recommend [company name] to a friend or colleague?”
  • Customers respond with a 0-10 point rating with 10 being extremely likely to recommend
  • You then create 3 categories of customer loyalty based on the scores:
    • Promoters (score 9-10) are loyal enthusiasts who will keep buying and refer others
    • Passives (score 7-8) are satisfied but unenthusiastic and will consider competitive offerings
    • Detractors (score 0-6) are unhappy and/or feel no loyalty to your company.
  • The NPS is calculated as the % of Promoters minus the % Detractors.
The logic behind the NPS calculation is that Promoters will keep buying and referring others to fuel your growth while Detractors can damage your reputation and impede growth through negative word-of-mouth.

A NPS of 50% or higher is considered good. Companies with great customer loyalty have a NPS in the 70-80% range. However, research shows that most companies are floundering along with NPS in the 5-10% range.

When you do the customer survey, don’t just ask the one NPS question. Formulate at least 6 additional supporting questions that will help you analyze where to focus your attention for improving your customer loyalty and NPS. Don’t go overboard and ask too many questions – we all dislike taking surveys with endless questions.

NPS is not perfect and has been subjected to some criticism. However, it is a popular approach that is favored by many CEOs because it provides a straightforward single measure that can be compared with other companies and industry averages. Just as important – it is one metric in which all functional areas of your business can have a stake and influence.

More details on NPS are available on the Net Promoter website.

Do you use NPS? If so, how has it worked for you? Your comments are always welcome.
Copyright © 2009 The Marketing Mélange and Ingistics LLC.

How customer loyalty depends on employee satisfaction

We’ve all experienced it – you go to a store to buy something and the service is lousy, you walk out annoyed and make a mental note to never shop there again. Or you go to another store selling the same stuff and the service is excellent, you walk out feeling good and make a mental reminder to come back to this store when you next need whatever they sell. The difference behind these experiences is primarily employee training and attitude. Employees who are poorly trained and/or dissatisfied with how they perceive being treated by their employer and manager will reflect that in how they deal with customers.

How does this apply to B2B marketing and sales? Many B2B companies are focusing on customer retention and loyalty as a means to market and sell additional products/services/solutions to existing customers. A key element of this strategy is to increase customer retention and loyalty. Firstly, we need to recognize these are different attributes:

  • Customer retention means that a customer continues to actively use your product/service/solution and there is some continuing relationship such as subscribing to support or maintenance services.
  • Customer loyalty means that a customer desires to continue doing business with you based on their positive experience and satisfaction. They want to buy more from you.
While you obviously want to retain customers, developing customer loyalty is the key to generating significant revenues from existing customers.

However, before you set off on any marketing and sales program based on customer retention or loyalty, be aware that there is a direct correlation between employee satisfaction and customer loyalty. There is a lot of research to support this – just search for ‘customer loyalty and employee satisfaction’ in your favorite Internet search engine. If your employees, in every area of your business and particularly those who interact with customers, are dissatisfied with their situation and/or the conditions at your company overall, your customer loyalty rating will probably be impacted negatively.

To adapt an old adage – “customer loyalty starts at home” – there is no point in launching a customer loyalty program for generating more sales unless employee satisfaction and attitude at your company is generally positive. Unfortunately, during this challenging economic period, companies are doing many things to undermine employee satisfaction and are mistakenly expecting to improve sales via customer loyalty at the same time.

“Bring a good attitude to work and customers will feel it all day long.” – Anonymous

Customers can sense when something is wrong at a company based on the demeanor of the employees. An employee satisfaction program should be an integral precursor to using customer loyalty for marketing and sales programs for best results.

If you have a customer loyalty focus in your organization, check out this blog post by my good friend and former colleague Melissa Paulik about the role: The Trials of the Customer Loyalty Specialist.
Copyright © 2009 The Marketing Mélange and Ingistics LLC.

Buying Cycle – You have a customer – now what?

This last post in the customer buying cycle series, explores opportunities for marketing and sales to engage with existing customers to drive more deals.

Even though the customer has bought and successfully implemented your product/service/solution, the buying cycle continues with the customer focused on achieving the benefits and value that initially drove them through the earlier steps of the buying cycle. While a customer may not specifically be in the market to buy something at this time, the outcome from this phase of their buying cycle will determine whether they buy more from you in future and what recommendations they make to anyone who asks.

During the achievement step, responsibility for customer success is primarily with support and professional/consulting services. An effective way for marketing to connect with the customer and monitor progress during this step is to ask for a case study. Since case studies are designed to highlight customer achievements, several responses from the customer are possible including:B2B Buying Cycle

  • It’s too early, no documented achievements yet – this gives marketing the opportunity to follow-up on a regular basis to monitor the situation.
  • It’s not going well / we’re having problems / no case studies until our problems are resolved – although negative, marketing can help bring attention to the situation to get it resolved, and continue to follow-up and monitor.
  • Customer agrees to do the case study as requested – confirmation of achievement you can now put on record and publicize to attract more customers. Also opens the opportunity to develop a mutually beneficial long term business relationship with the customer.
The last step in the customer buying cycle is to have a loyal customer. If your business and product/service/solution creates value for your customer, a loyal customer will create value for your business:
  • Lifetime customer value – the total revenue from loyal customers over the relationship lifetime can be many times the initial purchase
  • Loyal customers are more willing to be positive references you can use to win other deals
  • Loyal customers will promote your product/service/solution in their business dealings generating referrals
It takes significant time, effort and resources for most B2B companies to acquire net new customers. But that’s just for the initial sale – it takes more time, effort and resources to unlock the much larger lifetime value of a customer.

IMO, the key consideration for B2B marketers is that you have two very different audiences and therefore need two different marketing strategies that translate into specific campaigns and programs for each audience:
  1. New customers – how to find and acquire net new customers – this is the lifeblood that feeds the long term viability of a business.
  2. Existing customers – how to develop customer loyalty that unlocks the significant lifetime revenue stream – this is the major source of revenues and profits for the long term.
A key consideration from this series of posts is that the customer buying cycle begins long before your sales cycle and continues long after the sales cycle is done. How do your marketing strategy and sales cycle connect with your customer buying cycle?

Your comments are always welcome.
Copyright © 2009 The Marketing Mélange and Ingistics LLC.