A digital marketing strategy lives and dies by how well it caters to customer experience. As marketers, most of us think about targets who are not yet customers and how we can convince them to convert. We create a potential customer experience. But does the actual customer experience live up to what our initial marketing offers? We spend a lot of time crafting a single customer view using aggregated data to ensure that our picture of the target customer is as close to comprehensive as possible. This comprehensive view is what enables our marketing efforts to appear in the right channel at the right time to meet potential customers where they are. We are creating an experience to attract and convert, and most digital marketing experts worth their salt have experience and insight into this process.
But what about the focus on customer experience for the existing customer?
What is precision marketing?
Loosely defined, precision marketing is a technique that focuses on customer retention, upselling, cross-selling and fostering brand loyalty. These key activities get lost sometimes, whether in the haze of overemphasizing new growth and pursuing new business, or because organizations without defined customer success practices, roles, or clear strategies for managing existing customers are ill-equipped to make use of precision marketing. Yet, if we have customers already and want to keep and extend the relationship with them, we should constantly be developing a precision mindset with regard to ongoing marketing directed at individual customers. That is, we continue to refine the unified customer view to understand pain points, and most importantly, relevance. It’s through relevance that we can plan and execute an effective precision marketing strategy.
Why do I need precision marketing?
Precision marketing isn’t new, even if the term itself isn’t bandied about all the time. All marketers recognize the inherent value of keeping customers we’ve already worked and expended resources to attract and convert. At least when we talk to our customers and prospects about their marketing and sales challenges, most are aware of the value of retention and upselling.
But there isn’t really a quick-fix approach to keeping customers happy. Why? In part, it’s because the general marketing techniques used to generate leads are sometimes blunt instruments, however effective they may prove to be, while precision marketing is about taking a scalpel to perform a delicate and dexterous operation. The customer relationship, even if it remains transactional in nature, nevertheless feels as though it is moving beyond a simple transaction. It demands deeper understanding to be able to anticipate customer needs and both provide solutions and empathy.
Why is precision marketing difficult?
Empathy and accuracy make retention, and supporting precision marketing tactics, difficult and frequently neglected.
- Precision marketing can be more challenging than initial inbound and outbound marketing efforts because, as the name implies, it focuses on precision, data and relationship-building. Working with both qualitative and quantitative data becomes more important at the same time as needing to nurture and build a closer relationship with customers. It’s a balancing act and requires both data and in-depth interpersonal skills to master. Both the data and the relationship underpin the growing picture of what is important to your customer. Many modern sales organizations are not built for this level of data analysis or relationship building, or indeed the sophistication required to succeed with precision marketing, especially in small to medium businesses.
- Precision marketing often requires scaling up with existing, and frequently limited, resources. Particularly in organizations that place greater value on new business and do not dedicate resources to customer retention.
- Precision marketing demands focus. Precision marketing is precise, so the “spray and pray” messaging and tactics that define many broader marketing campaigns no longer cuts it. Personalization is the name of the game.
- Precision marketing has a different toolbox from lead-generation and growth marketing. Retention requires loyalty building, and a constant stream of data or information about customers to continue making personalized, relevant offers to them. Marketing tactics, tailored both to the industry and the individual, such as introducing loyalty programs or educational programs, again require a great deal more research and effort.
The cost of neglecting existing customers: Leaving money on the table
Companies that neglect or forget to continue building relationships with, and understanding relevance to, their customers, do so to their own detriment. If you can reduce churn and boost the ROI on existing customer relationships, you improve the bottom line and don’t have as great an imperative to chase after new, “unseasoned” customers. As the old saying goes, you have to spend money to make money, and in the case of customer retention, you might not shell out money directly to retain customers, but will instead expend time and effort to keep customers on board.
And what are your losses if you just let churn happen? Obviously it depends on your business, but here are some considerations:
- While price is usually cited as the number one reason customers leave, a lack of customer service or support is number two.
- Lost opportunity: Inc. magazine reports that selling to new customers is at least 5-10% more difficult than selling to existing customers.
- If happy, existing customers are likely to spend up to 67% more than new customers.
What does your precision marketing strategy look like?
Precision marketing demands relationship building, whether this is through one-on-one customer contact (conversations, surveys, customer success programs, etc.), behind-the-scenes data collection and analysis, or responsive, targeted activities, such as loyalty programs (e.g., for frequent flyers, hotel guests, coffee buyers — it really does not matter what.
The aim is to recognize and reward people for sticking with you.
Do you need help finding ways to incentivize your customer base to stick around? Let us help you. Get in touch to discuss your precision marketing strategy.