By: Scott Wright and Jack Bowen
When we ask our clients why customers buy from them, much of the time, they either don’t know, or are completely off-base about the reason. In an uber-competitive marketplace and with so much at stake, this inability to define why people should buy your product or service can be a fatal misstep.
As the old saying goes, "Half the money I spend on advertising is wasted; the trouble is I don't know which half." This quote from John Wanamaker, a marketing pioneer, encapsulates a challenge that remains relevant today. But, by leveraging insights from your current customers, you can ensure a higher ROI on your marketing investment.
In , marketers estimated that they wasted an average of 26 percent of their budgets on ineffective channels and strategies. So, right out of the gate, an uninformed approach to marketing can lay waste to a quarter of your marketing budget.
Given the hard work you put in (encouraged by our first blog) to ensure your marketing budget wasn’t sliced in 2024, there’s no room for error in your approach to hitting the target. We’ve often encountered new clients who were taking a “one-size-fits-all” approach to marketing – treating sales prospects the same, regardless of the suitability of the prospect. We’ve seen the application of broad discounts and other promotions despite clear evidence of efficient customer acquisition or incremental profits.
Something has to give.
We espouse an approach called the , often known as the 80/20 rule. This principle posits that 80 percent of your results come from 20 percent of your efforts—or, in the context of business, a significant chunk of your profits likely come from a small segment of customers. Therefore, the logic follows: understand this segment deeply, cater to them effectively, and watch your strategic business planning pay off in spades.
So, the question arises: Do you truly know why your current customers choose you over competitors? A survey by Bain & Company highlighted that while 80 percent of companies believe they deliver a superior service, only 8 percent of customers agree. This disconnect can be a revelation. By narrowing it down, businesses can uncover a treasure trove of insights to supercharge their 2024 marketing plan.
In this blog, we’ll teach you the five steps to harness the power of current customers to power future profits. And we’ll get you laser-focused on how insights from these existing customers can make all the difference.
Let’s get started.
Segmentation is a vital step in the journey to harnessing the full potential of your customers and enhancing profitability. To begin, applie customer segmentation models to your existing customer base. This involves discerning which customers contribute the most to your profits. Metrics like Lifetime Value (LTV) can be invaluable for this purpose. By identifying these high-value customers, you gain a clearer picture of your revenue sources.
The next move involves engaging with these valuable customers through simple, yet powerful surveys. The objective here is to delve into the core of their buying behavior. What motivates them to make purchases? What specific factors drive their decisions? Moreover, it's equally important to explore why they haven't made more purchases.
These insights garnered from your valued customers can be nothing short of revolutionary for your marketing strategy. By understanding what influences their choices and what barriers exist to further transactions, you'll be better equipped to tailor your marketing approach -- crafting targeted campaigns that resonate with their motivations and overcome any obstacles preventing them from becoming more frequent buyers.
With the profile of your best customers and refine the targeting of your paid digital campaigns to find more of them. Boosting your digital advertising effectiveness hinges on the optimization of your approach.
Armed with a deep understanding of your top-tier customers, you're poised to fine-tune the targeting of your paid digital campaigns. Platforms such as Facebook offer a powerful feature — "lookalike audiences." This innovative tool empowers you to direct your campaigns toward users who closely resemble your most lucrative customers.
In this endeavor, it's paramount to weigh the potential gains from reallocating your resources. Shift your focus away from generic campaigns and, instead, concentrate on initiatives tailored specifically to high-value customer segments. By doing so, you're aligning your advertising efforts with those who are most likely to drive significant revenue for your business. Wannamaker would be pleased.
Are you doing all you can to go beyond the pithy advertising message, and providing real, in-depth messaging, that feeds all segments of your customer funnel? Crafting the perfect message is a pivotal step in your quest to connect with high-value customers. Start by assessing whether your advertising content genuinely strikes a chord with their needs and desires. This scrutiny should span both your digital and traditional messaging.
The key here is to emphasize the facets of your products or services that perfectly align with the purchase drivers of these top-tier customers. By meticulously tailoring your message to address their specific preferences and motivations, you'll make your offerings all the more appealing.
Your marketing content should essentially highlight how your products or services offer tangible benefits that cater to the exact expectations and aspirations of this high-value clientele. This attention to detail in your messaging doesn't just capture their attention; it keeps them engaged and motivated to take action
"Marketing is no longer about the stuff that you make, but the stories you tell." – Seth Godin, renowned marketing expert4. Leverage Customer Feedback to Improve and Engage
Never underestimate the transformative power of feedback. Take the invaluable insights you gain about purchase barriers and put them to work. Rather than letting this wealth of knowledge gather dust, harness it to elevate your offerings across all your communications platforms. Leveraging feedback across your website,social media, and email campaigns for example, will not only improve the perception of your products and services, but also will enhance your brand's connection and engagement with potential customers.
Leverage valuable customer experience insights to assess and drive improvements in the value and benefits your products or services actually deliver for your customers. Do your products or services need a tweak or an upgrade?
By taking this strategic approach to feedback, you not only enhance your products or services but also nurture customer relationships through personalized communication. This creates a win-win scenario where your offerings evolve to meet customer needs, and your email campaigns become more potent tools for conversion and engagement.5. Create a Word-of-Mouth Mechanism
Harness the power of word-of-mouth marketing, and take it to the next level by introducing a savvy referral program. Think about it — your most satisfied customers are often your most passionate advocates. They've experienced firsthand the value and excellence of your products or services.
A skillfully executed referral program can be the bridge that turns this enthusiasm into concrete, tangible (and measurable) results. Your satisfied customers are not just singing your praises; they're actively sending new business your way. This amplifies your brand's reach and influence in a way that's genuine and effective.
In essence, you're empowering your loyal customers to become your brand ambassadors. They're not just sharing their positive experiences; they're actively bringing new customers to your door. This is a powerful way to tap into the network effect and let your satisfied customers play a role in your brand's growth. Plus, it's yet another win-win situation, as your loyal customers are rewarded for their advocacy.
Let's Supercharge Your 2024 Marketing Together
Achieving success in your 2024 business planning hinges on a laser-focused approach to your existing customer base. As John Wanamaker's adage reminds us, advertising spending inefficiency is a pervasive challenge. To combat this, customer segmentation and in-depth analysis of high-value segments are paramount, facilitating targeted campaigns that align with customer motivations and obliterate purchase barriers. Moreover, optimizing digital advertising through tools like "lookalike audiences" enhances its impact, while tailored messaging caters directly to high-value customers' preferences and aspirations. Harnessing customer feedback elevates your offerings and enables the creation of personalized marketing campaigns, fostering customer engagement. Cap it all off with a well-executed referral program that empowers satisfied customers to become brand advocates, extending your brand's reach and influence and creating a mutually beneficial scenario.
Are you ready to leverage the insights from your existing customers to shape a robust marketing plan for 2024? If the prospect seems daunting or you're unsure where to begin, don't hesitate to reach out.
About Chief Outsiders:
Jack Bowen and Scott Wright are Fractional Chief Marketing Officers with Chief Outsiders, a national fractional CMO and CSO consulting firm. Bowen is an engaging, roll-up your sleeves leader who draws on 20+ years of C-level marketing leadership and growth experience with significant expertise in data-based, direct-to-customer (B or C) performance-marketing, driving both topline and profitability throughout – acquisition, conversion and sales operations. Wright has decades of executive leadership experience leading B2B and B2C businesses to accelerated growth across numerous industries. He works with CEOs and leadership teams to develop customer-centric strategies for brand differentiation and awareness, effective targeting, lead generation, customer experience, and the repeatable processes and core capabilities that create a foundation for sustainable growth.
Together, they are part of a team of more than 120 seasoned and battle-tested Chief Marketing Officers and Chief Sales Officers who have guided over 1,850 B2B and B2C companies across more than 70 industry verticals.
Chief Outsiders executives have the experience to help businesses quickly figure out how to accelerate growth. They work alongside CEOs as members of the leadership team to develop strategies, build organizational and technical capabilities, and execute marketing and sales initiatives that create growth engines. Contact us today to accelerate your growth. Learn more about Scott Wright here and Jack Bowen here.
Up Next: Dive deeper into the world of strategic growth planning, ensuring your business isn't just reacting to the market but leading it. Stay tuned for Article 3 of our 7-part strategic business planning series: “ How to Establish a Strategic 2024 Growth Plan and Justify Your Marketing Budget”
Full series on strategic business planning:
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