Listening to your customers is a great way to gain insights into your brand. What they say about your product or brand can help marketers understand what’s important to them instead of what YOU feel is important to them.
The CPG company research from existing customers surprised everyone on the brand team. The study had clearly shown that it wasn’t necessarily about the brand or what they did but, rather, the product. Their customers loved their frozen pizza; that’s all that mattered to them.
Studies show that 65 percent of a company’s business comes from existing customers, but most only spend 21 percent of their marketing budgets on customers they already have. So, where do we need to focus our efforts on marketing the customers we already have? Here are some foundational points in the customer journey to zero in on.
Researching your customers’ trends and needs will lead to sales and growth. Your existing customers are:
● 50% more likely to try a new product.
● 31% more likely to spend more than new customers.
● 14 times more likely to make a purchase than an existing customer.
Understand why your existing customers have come to you in a market with stiff competition. Then, champion those reasons. You must know what brings your customers in, whether it’s your products, customer service, or loyalty programs. By focusing on that knowledge, you can expand on what is working.
To keep existing customers, you need a deep understanding of why they are your customers. It can help with branded communications and advertising messages and focus on marketing that provides a better ROI. Engaging current customers positively impacts overall business goals in several ways, including increasing revenue by generating opportunities for sales of additional products and services.
A study by Adobe found:
- Repeat customers provided the most revenue. Forty percent of the brand revenue in the study came from 8% of the website visitors. Repeat customers provided more revenue throughout the year and during holidays and slow shopping.
- New customers don’t spend as much as repeat customers. The study found that marketers must bring in five new shoppers to equal the revenue of one repeat buyer.
- Repeat customers had a direct impact on increasing revenue. For every 1% of shoppers who return for a repeat visit, revenue rises 10%.
The problem is most brands don’t know why people are repeat customers.
For example, consider Subaru, which has a loyal customer base and many repeat customers. What makes these customers so loyal? First, Subaru’s have a high resale value even with 100,000 miles. Second, they’re rugged cars that can go through all types of weather. Finally, Subaru does a great job of engaging current customers with a monthly magazine, displaying plaques that owners can place on their cars, and being a socially responsible brand. There are over a dozen Subaru Facebook groups where customers show how proud they are to be owners.
Then there are brands like Oreos. To their customers, the brand IS the cookie itself. Customers love the way Oreos taste that even private label equivalents can’t match. Oreos has also been a socially responsible brand supporting the gay community with a rainbow cookie at one time. Oreos are so successful that they now have multiple Oreo products. Their brand is the cookie.
So how do you keep existing customers? First, by asking them in research, you understand why they ARE your customers. Second, you don’t try to be something you’re not. If people love your product, focus on the product, not developing a new digital strategy. Finally, good brand marketers understand how important your branding is with existing customers.
The more customers you retain, the more new customers you can bring in through word-of-mouth marketing. Still, that all starts by understanding your current customers.
Too many brands are focused on growth, even at the expense of profits. Wall Street always wants to see change, but a steady customer base with good profitability can make shareholders very happy.