In my last post, we looked at re-tooling the “price” – P in the marketing mix. This week I’d like to hone in a bit on the “promotion” -P.
We all know that marketing expenditures are shifting from traditional branding efforts and media to more direct ROI methods and “customer nurturing” or social media. With budgets shrinking marketers are faced with having to do MORE with LESS. So, what are some of the savvy marketers doing?
Well that depends on what industry you are in, and whether you are a B-to-B or B-to-C marketer. But, one strategy that many marketers have embraced is to focus more on RETAINING customers rather than acquiring new customers. I’m not saying they are abandoning their new biz efforts, but SHIFTING more of the marketing budget towards retention.
If you think about the old 80/20 rule (in the B-to-B world), where 80 percent of your business comes from 20% of your customers, then it really makes sense regardless of the economic climate to keep those customers loyal to your brand. Many companies are stepping up their efforts to identify and nurture the decision makers and influencers in their top 20%. It’s not enough to just focus on one or two individuals in an account, but rather anyone who has an experience with your product or service.
Another main reason is the obvious –it simply costs much less to maintain a customer than to acquire a new one. So, in a downturn when budgets are scarce, it makes sense to change your main focus to maintaining your market share vs. growing it. Some of the tactics being deployed are:
Loyalty programs: Companies that have them are enhancing and promoting them more. Companies that don’t have a loyalty program are creating them. One strategy that is also growing is the “brand ambassador” program. The brand ambassador program can be implemented with various media —direct mail, email, inserts, collateral material, social media, and by word-of-mouth. It’s simplest form is the “referral program” where your friend gets xx and you get xx for referring them. A few more expensive to implement, but bring in a positive ROI are the following social media tactics:
Tap into customers’ enthusiasm with online ratings and reviews. Many marketers have seen an explosion of new sales just because they implemented this feature in their website. One company, eBags expects to yield over $400,000 in profit from a $200,000 investment in one year!
Create a community to energize your customers. This works best if your customers have a passion for your product/service and have an affinity for each other –especially in a B-to-B environment. Constant Contact- an email service provider for small business owners is experiencing an incredible snowball effect from this effort —13000 participants -10% from it’s customer base, with 30% of the community providing referrals. That equates to an 82% growth rate for the company!
More to come..have a great day! Brian.