March 2009 Archives

I was reading a debate from B2B marketing (www.b2bm.biz/blog) - two people were debating where to put focus. Do you spent everything on holding onto your current customers at a time when others are trying their hardest to lure them away or do you focus on acquiring new custoemrs.  Karine Del Moro, The European Director of Marketing at Satmetrix highlighted research showing that loyal customers will repurchase more frequently than non-loyal customers, spend more on additional products and services and have a higher propensity to recommend.

Attracting new customers can be harder in a recession as customers are risk-averse, special deals created to acquire new customers could alienate existing customers.

Her summary was that in a recession, smart companies will concentrate on growing existing customers by: addressing issues that impact retention, motivating customers to purchase additional offerings

On the contrary, Heather Westgate, the Chief Exec at TDA disagrees that acquisition is a waste of money as new customers are the life-blood of any organisation.

Rather than focusing exclusively on acquisition and retention, b2b marketers should be looking for innovative ways to enhance customer cycle and improve profitability. Customer-centricity is essential: ie to remain relevant and competitive in these challenging times. In other words, we have to understand exactly what motivates buyers and align activity as appropriate.

So when alliocating marketing spend - we should be asking whcih customers will be most profitable to acquire and which it will be most profitable to retain - over the short and long-term -and then weight the budget accordingly.

Investing in sophisticated data analysis and segementation helps to drive astute budget allocation - it leads to a better understanding of existing custoemrs (facilitating cross-selling & upselling) and enables acquisition to concentrate on business customers with the propensity to deliver a higher lifetime value.

Chuck Richard, Vice President & Lead Analyst - at Outsell has found that:

* Small B2B advertisers (1 to 100 employees) report 29% higher lead generation effectiveness for cross media campaigns and large firms (1,000+

employees) report 28% higher. Small consumer advertisers report even more uplift, 33%, and large consumer advertisers report 27% uplift.

Outsell reports that B2B advertisers have found that cross media campaigns using print plus online plus events are 28% more effective than campaigns using only a single medium.

The data from over 400 B2B and 525 consumer advertisers is compelling and consistent. Small B2B advertisers (1 to 100 employees) report 29% higher lead generation effectiveness for cross media campaigns and large firms (1,000+ employees) report 28% higher. Small consumer advertisers report even more uplift, 33%, and large consumer advertisers report 27% uplift.

It is swimming against the tide to sell cross media campaigns when advertisers are reducing their spending on print and event. But this Outsell data shows that collapsing spending to a single medium, such as online, lowers ROI by reducing the effectiveness of leads that single medium campaigns generate. A 27% to 33% boost in campaign effectiveness is an overpowering reason to maintain spending on a mix of media that strengthens brands, awareness, receptivity to online messages and drives interested leads to an advertiser's products and services.

Here's a summary of an article that was published in B2B magazine - written by Martin Green at Net Promoter company Satmetrix. It provides some practical advice on how to build revenue by segmenting according to customer loyalty.

'As the recession takes its toll, marketers are increasingly expected to do more with less. So what can you do? One answer is to segement your customers by the experience they have with you so that you can focus on the most loyal, lucrative and infludential customers.

According to research, loyal customers exhibit four key behaviours that drive growth and profitability:

1. Repurchase

2. Increased purchase - thanks to upselling and cross-selling

3. Refer you - wom recomms drives both new business and reduces the cost per sale

4. Provides feedback - insight on product and service

So how do you identify customers who behave in this way?

Net Promoter helpd you identify the strategic value of a customer base as it segments by the level of loyalty. The answers to the NP Questions (How likely are you to recommend product/service x to a colleague or friend) segments customers into three groups based on whether you have missed (detractors), met (passives) or exceeded (promoters) their expectations.

As a result, you can importantly take the following action:

1. Activate your promoters to positively refer your business more often - passives are most open to competitor offers; detractor accounts can cost your business by feeding the marketplace with negative comments about your business. Take the most profitable detractor accounts first and see if you can turn around the relationship

2. Obtain NPS at multiple levels of the account - ensure you capture feedback from decision-makers, influencers and end-users of your product and service. Use the feedback as a catalyst to drive a strategic review of the account

3. Overlay account-level NPS feedback on sales pipeline data. One benchmarking study showed that each promoter customer in the software industry generated an additional £400k of revenue through +ve recommendations; whilst each detractor customer created a loss of £500k through negative recommendations.

Using NP as an integral part of your segmentation and strategic account management will help you to prioritise and focus marketing action on delighting the most loyal, influential and lucrative customer segments'.

 If you don't have a PR policy in place, now's the time to implement one. Practice your copywriting skills or assign the job to an appropriate colleague and get press releases sent out to as many suitable contacts as you can gather.

 Becoming active in forums relating to your area of business is another golden opportunity to promote your organisation. Sift Media is a forum owner and we have seen first-hand the benefit to companies of getting involved in threads that concern their line of business. By posting helpful comments on threads you will become seen as an expert and you organisation will be positioned as a thought leader.

 If you're not already doing so make sure your company's website is well maintained with easy navigation and engaging content.

 Lastly (and you really should already be doing this one) send regular email newsletters to your existing customers. A fully engaged customer is more likely to be a repeat customer.'

I like this site - something which is taking positive action and focusing on what can, rather than can't be done.

http://www.wowcreative.co.uk/recession/index.php?err=login

Some ideas for maximising resources are the simplest and you often see them in smaller companies. Take research content for example. I have seen many examples of big companies who invest in research, get great insight, but then don't make the most of the PR opportunities that that content offers. The companies who are good at making the most of research results tend to be food manufacturers. They'll do a small piece of research and if the results show that chips, for instance, are actually good for you - well, it will be on the front page of 'The Sun' and on 'GMTV' without a doubt - providing enormous brand exposure and increased sales for the manufacturer who sponsored the resesearch in the first place. You don't have to be a food company to benefit from this approach and importantly, you don't need enormous investment.

In the B2B space, for example, it's easy to do low-cost surveys of the marketplace to get insight into the marketplace's views of a 'hot topic'. The results can spur all kinds of stories and press released to get maximum reach and importantly engagement from your customers and those who should be customers. On top of that, the content can be used to create a webinar or round-table discussion session to bring you face to face with the markeplace.

Sounds a bit theoretical perhaps, so to take this forward and please forgive the plug, but RB Insight have defined a proposition around this 'Hot Topic Research'. The proposition is very cost effective as RB Insight are part of Reed Business Information and have easy access to a huge database of business professionals across most sectors. You can find out more by viewing: www.rbinsight.com, but the way it works essentially is:

1. You think of a key topic that is worrying the marketplace at the moment. The impact of new legislation for instance

2. RB Insight creates a questionnaire and polls their user base and magazine readership to get their opinions

3. The results are written and distributed on their websites, email bulletins and magazines as a start

The whole thing I believe is sponsored and that content itself could provide the sources for a whole marketing programme consisting of emailed video bulletins, webinars and round table discussion groups as well as additional press and broadcast opportunities... not to mention the viral opportunities that social media now presents.

Like every great marketing campaign, it starts with a simple idea that then gets seeded and then takes on a life of its own - but for an initial investment of a few k, you get huge brand expsure and reach, alignement with an important issue and most critically the attention from your marketplace.