Why aren't Customers getting more Marketing Attention?

Here at Dunthorpe we get to experience firsthand how this economy has impacted marketers trying to generate leads with less resources and greater pressure to deliver. In these stressful times folks are going to use every trick in their marketing toolbox to create sales opportunities. That means using lead generation techniques that traditionally yield the best performance in a b-to-b audience – like telemarketing – (and certainly that’s been our experience) – combined with emerging and low cost techniques like social media marketing or email to augment their potential reach and performance.

All well and good.

So here’s the rub… why is it that companies are not making more of one of their best performing audience groups… their current customers? It’s been known for years that customers are the best (and cheapest!) source of new business. Here are some stats from Sirius Decisions…
- 80% of new business revenue comes from existing customers
- Customers tend to respond 3x more than non-customers
- It takes HALF the number of customer contacts to deliver TWICE the deals compared to new prospects
- It costs FIVE times more to find a new customer than it costs to keep an existing one

Pretty amazing data… Our agency has experienced the same kind of behavior: programs that go back to customers for up-sell or cross-sell promotions are performing incredibly well. In one program we converted 23% of the customer list to a sales callback: or one third of the number of people we were able to speak with directly. In fact, we delivered 1500% more appointments than we had anticipated (no, this is not a typo and yes, this is a crazy number!).

And in another cross-sell program, one out of every three customers we connected with asked to speak with their rep about the offer. That beats the usual performance of appointment-setting programs about six times over – a huge up-tick and a really quick and easy way to uncover sales opportunities that will convert faster than prospects because there’s a relationship and trust already established.

You can imagine that these kind of performance metrics have gotten us (and our clients) pretty excited – and it’s prompted lots of discussion as to why corporate marketing departments – and their sales counterparts – tend to exclude customers from their focus. There are a couple of reasons that we’ve figured might be contributing to this – I’d really like to hear from other marketers to see if these match up to your experiences.

1. It’s all about the quota: I’m pretty sure the biggest reason customers don’t get their deserved attention is down to the numbers, targets and quotas that Marketing and Sales Departments are tasked with delivering each quarter. You know the drill: Marketing needs to deliver 1,500 leads per month to Sales: then Sales has to convert so many of those leads to Opportunities, RFPs, pipeline and so on. Focus is typically on generating ‘new’ opportunities with ‘new’ organizations i.e. expanding the empire without really focusing on investing efforts on those segments that deliver the most.
2. Can’t get anywhere near them: we speak to lots of marketing organizations in the country and they’re working really hard to deliver new business. When we ask them about the potential opportunities to market to customers, often we hear that some other department ‘owns’ the customer relationship and it’s strictly off limits to Marketing. Usually Sales or Customer Services ‘owns’ that relationship and it’s closely guarded against possible interlopers. Fair enough – you do want to be sure that relationship is treated with respect. But often what happens is that customers are closed off from any central co-ordinated marketing efforts and so are left to languish in the hinterland. Maybe that explains their reaction when offered a conversation with a sales rep: lots of “yes please” or even scarier… “I haven’t spoken to a rep in years – YES PLEASE!”

So if you’re seeing some of these behaviors in your organization then join our enthusiastic effort to make customers the Marketer’s New Best Friend in 2009….your customers and executive team will thank you for it.

Mairi Burns
Director of Client Services
Dunthorpe Marketing Group