Commentary

Customer Marketing: Keep Current Customers Comfortable!

In a study by Influitive, conducted by Demand Metric, the resources and investment organizations are making in Customer Marketing… “pursuing revenue from existing customers…” is considered to be significantly important to roughly three-quarters of the respondents.

The view most organizations have of revenue generation is pretty straightforward, says the report: generate leads, qualify them, pass them on to the sales team who then closes deals with new customers. But, what sometimes gets lost in the shuffle is the revenue generated from current customers.

Customer Marketing is often a backwater in many companies, but any firm’s customer base is an asset, though often an underutilized one. It involves cross selling, upselling and building better relationships with established customers. Far from being a backwater, it is a proven contributor to revenue growth, says the report.

The analysis of this study’s data provides these key findings:

  • 92% of organizations in this study have some sort of Customer Marketing efforts or function, and 53% of them report getting moderate to significant revenue as a result
  • Large companies (72%) are much more likely to report moderate to significant Customer Marketing revenue than medium (45%) or small companies (52%)
  • 85% of study participants are using some sort of metrics to track their Customer Marketing efforts. The metrics most associated with moderate to significant revenue impact from Customer Marketing are “Renewal rate or churn” and “Customer influenced revenue via referrals or references.”

The results organizations are getting are evenly varied across of spectrum of no revenue or measurements to significant revenue contribution.

  • Results or revenue not tracked   (27%)
  • Revenue contribution is minor   (20%)
  • Revenue contribution is moderate   (28%)
  • Revenue contribution in significant   (25%)

The responses were put into two groups to analyze the results of this study:

  • No/low revenue impact: includes all participants that selected “Customer Marketing results or revenue isn’t tracked” and “Revenue contribution is minor”
  • Moderate/high revenue impact: includes all participants that selected “Revenue contribution is moderate” and “Revenue contribution is significant”

Relationship Between Company Size And “Moderate/High Revenue Impact” Revenue Results From Customer Marketing

Company size

% Reporting Significant Impact

Small companies (those producing $25 million or less in annual revenue)

52%

Medium companies (producing from $26 million to $500 million annually)

45%

Large companies (over $500 million annually)

72%

Source: Influitive/DemandMetric, September 2014

Study analysis detected threenoteworthy differences in the Customer Marketing activities pursued by survey participants in the no/low revenue status group compared to the moderate/high revenue status group.

Customer And/Or User Group Events Are The Top Customer Marketing Activity

Customer Marketing Activity

% of Respondents Utilizing

Customer and/or user group events

61%

Customer testimonial program

54%

Online customer community

54%

Cross-sell and/or upsell campaigns

50%

Customer advocacy program

48%

Customer referral program

46%

Customer satisfaction program

41%

Renewal campaigns

31%

Other activities

6%

Source: Influitive/DemandMetric, September 2014

Measuring anything that marketing does is important, and Customer Marketing activities and results are no exception, says the report. First, the perception of the ideal metrics; then, metrics are actually in use and compare the differences, if any.

Ranked Metrics For Tracking Customer Marketing Effectiveness

Rank

Measurement Metric

1

Upsell and/or cross-sell revenue

2

Renewal rate or churn

3

Customer influenced revenue via referrals or references

4

Satisfaction

5

Product usage or adoption

6

Number of customer-related campaigns (e.g. email, newsletters)

7

Net Promoter Score (NPS)

Source: Influitive/DemandMetric, September 2014

 

Customer Marketing Metrics Study Participants Say They Are Currently Using

Customer Marketing Metrics in Use

% of Respondents

Renewal rate or churn

44%

Customer influenced revenue via referrals/references

42%

Upsell and/or cross-sell revenue

39%

Number of customer-related campaigns

37%

Satisfaction

37%

Net Promoter Score

29%

Product Usage or adoption

27%

None

15%

Other metrics

11%

Source: Influitive/DemandMetric, September 2014

The report points out that the metric identified as most important, upsell or cross-sell revenue, ranks third in actual usage. The most important metric should probably also be the most frequently used, opines the report. But, the reason it’s not is probably due to the difficulty of accurately tracking upsell or cross-sell revenue.

A final observation about metrics, says the report, comes from analyzing the metrics in use through the “Status” variable, and concludes that there are two important metrics associated with moderate to significant revenue impact:

  • Renewal rate or churn: The higher revenue impact group uses this metric in 59% of cases, compared to just 27% for the lower revenue impact group
  • Customer influenced revenue via referrals or references: The higher revenue impact group uses this metric in 53% of cases, compared to just 30% for the lower revenue impact group

When either of these metrics were in use by an organization, it was more likely for their Customer Marketing activities to have a higher revenue impact, concludes the report. And, the greatest insight from this study, says the report, also provides the most compelling justification for Customer Marketing: the strong relationship between Customer Marketing and customer satisfaction.

To access the complete PDF report, please visit Influitive here.

 

 

 

 

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