Lead, sale, next. Focus on hitting that sales quota. That’s the process for many B2B salespeople. No looking left or right. No thinking about what additional business it might be possible to develop with an existing customer. Once a sale is made, they are off, onto their next target and next sale. What a short-sighted sales strategy that is.
But maybe, just maybe, that’s changing. According to a recent study, an increasing number of B2B marketers are (finally) understanding and appreciating the value of customer retention and what repeat orders and more business from existing customers mean to growth and profitability. Most however, realize that their companies’ efforts at marketing to existing customers leave much to be desired.
The 2017 State of Customer Marketing Report sponsored by Influitive and conducted by Koyne Marketing takes a deep dive into this topic, querying more than 200 B2B marketing executives to learn more about their attitudes on customer marketing and to gain a better understanding of how they plan, resource, and measure marketing to their existing customer base.
Important but Not Necessarily Effective
The headline finding from the study is that nine in ten respondents acknowledged that customer marketing is very or somewhat important to their business. It is expected to increase in significance even more, with 93 percent saying that customer marketing will take on greater importance in the coming year. (Compare that to 84 percent who said the same in 2014.)
As this graphic from the study illustrates, that level of (at least somewhat) importance is reflected across all sizes of business, although the larger the organization, the greater significance is attached.
Image source Benchmark Report: 2017 State of Customer Marketing
Contrast with the level of satisfaction with customer marketing results, and you can see there is a disconnect, particularly with smaller and medium sized companies.
Image source Benchmark Report: 2017 State of Customer Marketing
Around half of small to medium sized organizations aren’t satisfied with the results of their customer marketing efforts, despite their acknowledgement of its importance to the business. Even in larger organizations, three in ten are less than satisfied.
Maturity and Measurement
Overall, the study found that large companies are 61 percent more likely than small companies and 36 percent more likely than medium sized organizations, to see at least a moderate impact on revenues from their customer marketing strategy. Of course, one might expect to see higher returns, and therefore greater satisfaction, with the larger customer base and more ample resources that the bigger companies typically have at their disposal
However, the study suggests there are two factors influencing satisfaction with customer marketing efforts.
Maturity. Most large organizations were found to have been investing in a customer marketing strategy for more than five years. By contrast, the 18 percent that have no customer satisfaction program in place at all were small companies.
Image source Benchmark Report: 2017 State of Customer Marketing
While many of the smaller companies responding to the survey expressed a desire to have programs in place, most didn’t feel they had the resources to do so.
Measurement. It should come as no surprise that dissatisfaction levels are particularly high where results weren’t tracked or revenue contributions were perceived as being insignificant.
Image source Benchmark Report: 2017 State of Customer Marketing
Once again this is an area where the larger organizations, with dedicated teams, greater resources, and more mature customer satisfaction strategies would be expected to perform more strongly.
The Vicious Circle
The study concluded by stating smaller companies were finding it hard to bridge the gap and establish effective customer satisfaction programs. Companies that don’t track performance and/or see poor results said they intend to decrease investment in customer satisfaction, creating a vicious circle hindering progress. Larger organizations, meanwhile, continue to invest, while many medium sized companies are seeing benefits and making significant investments.
Image source Benchmark Report: 2017 State of Customer Marketing
The findings suggest there is quite an opportunity to stand out from the crowd, for those small or start-up companies able to resource and maintain a customer satisfaction program. It’s hard to disagree with this conclusion from the report:
“If results for small and mid-size companies are to improve, leaders in the executive suite must ensure their Marketing, Sales and Customer teams are working collaboratively on a strategy and an executable plan to maximize the value of customer assets; and are implementing processes to measure the performance of those efforts.”
Customer Marketing = Customer Satisfaction
Customer marketing of course is about so much more than renewal or repeat orders. It’s all about providing an exceptional level of customer service that builds relationships, projects credibility, and establishes trust.
The formula is reflected in the top three responses by respondents when asked to rank the skills customer marketers need to be successful:
- Relationship building
- Communication
- Customer service
Customer references and testimonials stood out as the most used customer marketing strategy, with user groups and events also proving popular. As this graphic from the study illustrates, other tactics where used pretty widely across the piece.
Image source Benchmark Report: 2017 State of Customer Marketing
Interestingly, the report suggests organizations, while understanding the value customer marketing creates, may have some difficulties in properly tracking the value of their customer marketing activities. The top three metrics in use for instance are upsell/cross-sell revenue, renewal rate/churn, and customer satisfaction, which don’t typically correlate with the most common customer marketing activities.
The report concludes that whichever metrics companies use, the most successful organizations intrinsically understand a satisfied customer is much more likely to place repeat orders and act as an advocate for their business. The interesting thing to me is that this is not new news, it’s Marketing 101. An existing customer is exponentially more valuable to a company, any company, than chasing new customers.
A Missed Opportunity?
It appears that B2B companies of all sizes are now realizing the value of deepening relationships—and selling more to existing customers. What is also clear is that there is a great deal of room for improvement, and therefore a great deal of unrealized revenue—particularly so with smaller organizations. Investment in customer marketing continues in large companies, and medium sized companies are planning significant increases. Smaller companies with fewer resources seem reluctant to commit to a customer marketing strategy, perhaps disillusioned with lack of results, or with their inability to track progress—a missed opportunity.
The report promotes a best practice approach to plan strategically, measure effectively, and invest wisely. I would add that committing long-term and promoting a customer-centric, customer service-focused culture within the organization is smart business. And these things? Even the smallest companies can do this.
What challenges keep you from developing deeper relationships with your existing customers? Are you more focused on new customer acquisition than selling more to existent customers? I’d love to hear your thoughts on this.
You can download the full report at Benchmark Report: 2017 State of Customer Marketing (registration required).
Photo Credit: RollisFontenot Flickr via Compfight cc
Shelly Kramer is the founder and CEO of V3 Broadsuite (V3B), Senior Analyst and one of the founding partners at Futurum Research. A serial entrepreneur with a technology centric focus, she has worked with some of the world’s largest brands to lead them into the digital space, embrace disruption and the reality of the connected customer, and help navigate the process of Digital Transformation. As a brand strategist, she has decades of experience helping global companies with marketing challenges, and driving strategy and growth for B2B brands across multiple verticals.
