Initially, marketing was about acquiring new customers. Then, it evolved to acquiring and retaining them. But now, it’s about how far you can go with the customers you already have.
Your business can only survive if you adapt your marketing methods to the changing times. Gone are the days when all you had to do was to bring a new customer on board and leave the rest to your customer support team. Customers have evolved, and so have the times.
Say hello to customer marketing, the marketing formula that all businesses of today need to know.
What is customer marketing?
Customer marketing is a form of marketing that targets your existing customers rather than targeting potential customers. So, it functions throughout the entire lifecycle of the customer.
Here are a few ways customer marketing can come into play:
Let’s say a new customer has just bought a product from you. You might promote other products and services that the customer could also be interested in. Or, you could share upgrade options for the product they have.
You realize that some customers love your brand so much that they recommend it to their friends and family. So, you figure starting a formal referral program, where they’re incentivized for recommendations, is a great way to promote your brand to a wider audience.
You also consider consistently engaging your existing customers, so they view you as more than just a brand. Use customer marketing correctly, and customers will love interacting with your content and helping you develop and refine products.
This, in a nutshell, is what customer marketing is all about.
How can customer marketing help your business?
Customer marketing can help your business grow in several ways. Depending on the campaigns you run, it can:
○ Foster customer loyalty. Make your business so engaging that customers will want to stay with you and keep purchasing your products or services – more in the next point.
○ Encourage repeat purchases. Increase the value of your business in your customers’ eyes by promoting (or adding) more products and services that your customers might like. Or, encourage customers to purchase upgrades and enhancements to already purchased products.
○ Keep customers up to date about new products and recent brand developments. Customers feel important when you generate buzz or discuss new products and brand developments with them. It makes them feel included and valued by your brand. Take things up a notch by including your customers in the development process. Ask questions or send surveys. What could be added or improved? What would they like to see more of?
○ Turn customers into advocates. When customers promote your brand, it feels more natural, and therefore more genuine and trustworthy, compared to messages that come straight from your brand. When customers function as advocates, your products will find a new audience among their friends, family, and peers.
To foster customer advocacy, you can formally ask customers for referrals in exchange for incentives (provided your customers are genuinely happy and are eager to share about you).
Why leverage customer marketing?
Why should businesses spend time and money marketing to existing customers when there’s plenty of fish in the sea? While attracting new buyers should always be a part of your business strategy, you should also leverage customer marketing to mobilize your existing customers.
Here are some compelling reasons why:
● Customer retention leads to higher profits. A 2% increase in customer retention has the same effect on profits as cutting costs by 10%. So, customer retention rates have a serious impact on your bottom line.
● Existing customers drive more sales than new customers. 80% of your future profits will come from just 20% of your existing customers. Your repeat customers generate around 65% of your sales. And returning customers spend 31% more on average than first-time customers.
● Existing customers are more easily convinced. It’s easier to convince current customers to buy again than to convince new leads to buy for the first time. Current customers are also more willing to try out new products, upsells, or cross-sells as they’ve already bought from you and have an in-depth understanding of your value.
● Customer advocacy is highly trusted. If an existing customer recommends your business to a friend, their recommendation is trusted more than ads that come straight from your brand. People would rather hear reviews and feedback from others just like them. In this sense, customer advocacy is deemed to be a lot more genuine than direct brand messaging.
● Loyalty is a given with referred customers. Referred customers tend to be more loyal than other customers. They have followed your existing customers into the fold, because the trust has already been established. So, it makes sense to have existing customers bring in new customers for you.
● Referred customers have a higher lifetime value. Referred customers spend more and have a higher customer lifetime value. On average, that lifetime value is 16% higher than non-referred customers for the same demographic type and time of acquisition.
● Higher ROI with less effort. Selling to an existing customer can achieve a success rate of 60-70%, while selling to a new customer, on average, achieves 5-20%. And in the realm of referrals, it costs less to bring in new customers via your existing customers. Also, if customers are persuaded to share on social media, one share may reach many potential customers, increasing your customer base – for free.
Types of customer marketing
Based on our research, we’ve identified seven different ways you can leverage customer marketing for your business:
1. Customer loyalty programs
As the name suggests, customer loyalty programs are about rewarding your customer for staying loyal to your brand. “Loyalty” goes beyond just purchases, though. It refers to any brand-building actions that you’d like customers to take to promote your brand, whether that’s through repeat purchases, social shares, or positive reviews.
By completing these actions, customers can earn points to redeem towards incentives of their choice. Often, these incentives are free products or store credits. But in some loyalty programs, points activate insider perks, such as early access to products and sales, exclusive deals, free shipping, or premium membership upgrades.
Sephora’s Beauty Insider customer loyalty program is an example of a tiered structure where the rewards stack up based on how much has been spent:
2. Mass brand updates
Mass brand updates are when you send messages to all your customers and followers at once.
A great example of a mass brand update is your brand’s newsletter. You can use a newsletter to provide product updates, introduce new product or service options, discuss special offers, or promote the latest deals. Or, instead of a comprehensive newsletter, you might focus on sending sales emails and shorter updates instead.
Social media posts also count as mass brand updates, since every customer who follows you can see them. They’re a great place to share sales and make big brand announcements.
Sales offers, deals, and upcoming discounts motivate customers to stay vested in your brand and can also result in repeat purchases.
MOO’s mass sales email looks simple. But it’s effective. The email leverages FOMO by appealing to urgency, and encourages existing MOO customers to take advantage of the sale before it’s too late.
3. Targeted email marketing
Targeted email marketing is a more exclusive version of the mass update method. With segmentation, you can separate customers into targeted shortlists based on certain values or qualities.
For example, you can have one list for people who are on your free membership plan, and another for your mid-tier paid plan. The sales messages you send to each list need to be adapted to seem personalized for the clients on the specific lists. So if they’re on the free plan, you can send promotional emails showcasing the benefits of being on the paid plan or incentivizing them to upgrade through an exclusive limited-time discount.
Depending on the segment, you may also promote add-ons to enhance the product they already have, or upgrades to their product or service plan.
Higher category members, or the VIPs on your list, can be offered exclusive sales deals, discounts, and early access to new product updates.
Buffer’s email is an example of how a SaaS brand can sell an annual plan by making the content wholly customer-centric. The email talks about how the switch can benefit the customer in terms of costs, as they’re already purchasing a more expensive monthly plan.
4. Customer referral programs
A customer referral program encourages your customers to recommend your products to friends and family directly. Ideally, you want to create a formalized customer referral program using referral software, so you’ll have a way to manage and track your efforts. Plus, it will make the overall experience user-friendly for your customers.
Using the software, you can create trackable referral links for your customers, so it’s much easier for them to refer their friends. These links will record which customers are responsible for each referral, and automatically reward your customers when their referrals are successful.
Starting a referral program, and promoting it to existing customers, should form a vital part of any customer marketing strategy.
Sock brand Bombas provides clear, easy-to-follow instructions on how to sign up for their referral program and get benefits. Customers can sign up simply by clicking the “Refer a Friend” button.
5. Customer-ambassador programs
Customer-ambassador programs are a more focused version of a referral program. Most elements are similar, except that customer ambassadors benefit from specialized training on showcasing your brand on social media (or even offline). Training typically involves social media briefings and a review of brand guidelines.
Customer-ambassadors will engage in social media advocacy where they show how they use and why they love your products (beyond sending referrals). So, for example, they’ll embed brand links on their website or within their social media posts. This works similar to referral links.
You’ll want to invite VIP customers who have purchased or shared the most to be your ambassadors, as they’re the most vested in your brand. The purchase pattern is evidence that they enjoy your products and keep coming to your brand as their first preference.
If you have a referral program, the ambassador program should offer more valuable rewards than the referral program. The ambassador program is a more “exclusive” version of the referral program, after all.
Check out Yelp’s ambassador program below, reserved for their top reviewers.
6. Encouraging user-generated content
User-generated content (UGC) is content that’s created by your customers featuring your brand, which they post on their social media channels. When current customers create user-generated content, they highlight your brand among their friends, family members, and everyone on their network. It’s a simple but effective way to get your brand in front of a new audience with very little marketing spending.
You can encourage user-generated content by asking fans to share branded hashtags and offering to feature the best content on your core business pages with creators’ permission. You can also kick off contests to encourage sharing, where the winner or winners get a valuable prize.
Starbucks deployed a similar content strategy for their #WhiteCupContest campaign. Users were asked to decorate Starbucks cups and share the images on social media. The prize offered was a $300 gift card.
7. Encouraging reviews
Positive reviews are one of the biggest indicators of brand love. You want to make asking for reviews a habit at all the touchpoints of the customer journey. For example, you might ask after a sale, or after customer support helped a customer through a problem or concern.
Reviews also have another benefit in terms of Google rankings. They add to your relevance for customers who are searching for products and services similar to yours.
Ask for reviews when your customers are at their happiest. That’s when they’ve given you some positive comments or if they keep making repeat purchases.
You can automate the process of asking for reviews with email templates that are triggered once a specific action has taken place. Here’s an example from Etsy, requesting a review from a customer right after the item was received:
Tips for success with any customer marketing
Before you take the leap into the world of customer marketing, there are a few aspects to consider. The tips we’ve shared below can help you skip a lot of the learning curve and avoid rookie mistakes that can derail your progress even before you start!
Have an exceptional product and stellar customer service
You could have the best marketing teams in the world. But if your product is lackluster, you will not have a sustainable business model. You also have to ensure your customer service goes above and beyond before expecting success from customer marketing.
An exceptional product, in conjunction with stellar customer service, is critical to ensuring repeat business.
Customers won’t buy from you again, or refer friends, if they are unsatisfied with your
product or customer service. Always look for ways to go beyond expectations with your product and service. You want to stand out, and this is one tried-and-tested method to do just that.
Listen to, and interact with, your customers
At the end of the day, your customers are people. And, people like to feel valued and important. Make your customers a part of your brand by talking to them, listening to what they have to say, and incorporating their valuable feedback into your business.
● Ask customers how you can improve or what you can do better. Apply the feedback wherever possible to show you are listening and genuinely care about customer relationships. Try using NPS (Net Promoter Score), a popular market research metric that measures customer satisfaction and loyalty.
● Engage with comments left by your customers on social media. Leave positive and uplifting responses. Let them know you’ll implement their idea; it can make them feel special!
● Think about inviting your most loyal and devoted customers to brainstorming sessions where you decide on future product developments. Ask them to be a part of the testing process and provide their feedback. Use customer feedback like before to refine your offerings and make them appealing to your customers.
When customers feel like they’re being heard, they’re more likely to stay loyal to your brand. And, they’re more likely to keep sharing your brand with others!
Offer incentives for brand-building actions
Rewards can be highly motivating for anyone, including your customers. Your current customers can become very enthusiastic about sharing your brand when they can expect something in return for all that work.
Whether you offer a reward for a repeat purchase, a referral, a review, or a UGC share, a customer is more likely to take action if marketing incentives exist.
Remember to choose rewards your customers will enjoy and appreciate. If you’re unsure, do some research by asking your customers what would motivate them to take action the most. Cash is a good all-rounder, but there are many different incentives that they may enjoy just as much, such as freebies, upgrades, swag, tech gear, tickets, etc.
Another idea worth swiping is tying the rewards to your brand, so you maintain that momentum in the customer journey. Prioritize store credits, discounts, and free products to reduce customer churn and encourage customers to keep coming back to your brand.
Emphasize advocacy, not just loyalty
Motivating just loyalty means existing customers are more likely to stay. But advocacy takes the relationship with your customers to the next level.
When customers are so satisfied that they’re willing to recommend you, this reflects highly on your brand. Brand advocates do much more for your brand than encourage new customers to take the next step. Referred customers are more likely to purchase, and more likely to stay with you and become repeat buyers, compared to customers who weren’t referred.
Rewarding customer advocacy (especially with discounts, credits, or free products) motivates existing customers to stay with your brand and buy more, plus encourages those customers to bring in new business.
There are several different ways to encourage brand advocacy. You can, for example, ask for customer reviews, drum up UGC, or drive customer referrals and word-of-mouth marketing (WOM) with incentives.
Remember that trackable advocacy is the best advocacy to drive, since it provides a way to constantly measure the impact on your bottom line.
Focus most on a referral program
Ideally, you want to focus the bulk of your customer marketing efforts on a referral program. We discussed earlier how referrals from existing customers appear more trustworthy than brand advertising. So, it makes sense to mobilize your customers as your brand marketers (through referrals) rather than try to acquire all your customers on your own.
A referral program is the best option to implement for advocacy. It motivates and incentivizes your current customers to talk about your brand and share its value with their peers. Plus, these referrals are direct, from friend to friend. Sometimes customer sharing like this can start a viral cycle, where referred friends then share with their own peers (who in turn refer their friends, and so on). It also helps keep customers engaged and focused on your brand.
When creating a referral program, you’ll want to formalize it by creating a structure and processes, and by using referral program software. Using software makes the process of sharing a lot easier, and helps you track the results of that sharing via referral links and other direct sharing options.
Software makes your program that much more official, giving it credibility. Also, using software will help you send those updates and reminders that help keep your program alive in your customers’ minds, so sharing becomes a habit.
Choose the right software for your type of customer marketing
The importance of software in customer marketing cannot ever be over-emphasized. Whether you’re a small business, an entrepreneur, or a large business, software can help you get more things done with less effort. Let’s look at some of the specific benefits that software can bring to your business for customer marketing.
● Automation and tracking of marketing activity. With software, you can automate and track your customer marketing results (ROI). In-depth data and metrics available on most software platforms can tell you how your marketing is doing. You can make decisions based on the data to improve your strategy for better results.
● Customer insights. A brand mention tool can help you listen in to customer sentiments. Find out what customers are really saying about your brand. Use this information to determine how to refine your products and services further.
● Add smart technology. Look into loyalty program software, reputation management software, and referral software for managing customer marketing campaigns. They can be highly beneficial in freeing up your time and helping you focus your efforts on strategy instead of administration.
Referral marketing software is especially effective for several reasons:
The software makes it easy to encourage customers to market for you,and tracks whenever existing customers bring in new customers (thanks to referral links). It’s simple to set up direct sharing via email, social media, and other channels.
You’ll motivate customer acquisition and retention at the same time through referrals. Software keeps your brand top of mind for your customers, through engagement features. Consistent contact and encouragement keep motivation levels high, so customers will keep recommending you. They’ll also feel engaged enough to stay with you for as long as they can.
The payout process is automated. This means you don’t have to manually ensure that your customers have received their incentives on time. One less thing to keep track of!
You will always have complete visibility on your referral program’s ROI. You’ll never have to second-guess how your program is doing. You’ll also always have enough data to help you make sound decisions to improve your bottom-line.
Examples of customer marketing
Let’s take a closer look at some examples of customer marketing in action. We’ll also look into some key takeaways that you can adopt into your own program for phenomenal results.
1. Lime Crime Partners in Crime (loyalty program)
Lime Crime is a vegan and cruelty-free makeup and hair color brand. The brand has chosen an eye-catching layout and coloring for their membership program landing page, so it appeals to its target consumer base. The membership program has a great name, “Partners in Crime,” that customers won’t easily forget.
Partners in Crime is a tiered customer marketing/loyalty program which means the more customers spend, the more rewards they can expect to earn. The brand lays out all the benefits table-wise so customers can instantly see what they can earn when they reach each tier. There’s also a helpful FAQ section at the bottom that lists all the things that customers should know about the program before signing up.
What you can learn from this program: A tiered loyalty program makes it possible for all customers to participate. Making the base level free is a good way to entice new customers. You can always continue to use email marketing to showcase the benefits of spending more after your customers have signed up. The sign-up is simply the first stage of the customer journey. Also, think about a point structure where customers can gain points and redeem them for discounts on purchases.
2. Starbucks Rewards (loyalty program)
Starbucks is a prime example of knowing what you do best and leveraging it to convince loyal customers to buy more. The landing page for their loyalty program showcases the incentive “free coffee” in a way that’s easy for anyone to see the moment they land on the page.
As a program member, you earn stars for every dollar you spend and you can exchange these for more coffee, food, and other products from the Starbucks franchise.
Starbucks showcases the tiered benefits in a visual manner making the experience of learning what you’re getting a lot more fun and engaging. So, for 25 stars, you get to customize your drink. For 400 stars, you get to own a signature cup, a bag of coffee, or your choice of select coffee accessories.
Starbucks also offers extras over and above these benefits. Also, if you choose to add funds to your Starbucks app, you get incentivized in the form of 2 stars to the dollar as opposed to the 1 star for pay-as-you-go.
What you can learn from this program: Encourage people, through incentives, to sign up for your app so consumers have a more direct way of engaging with your brand. Through apps, you can send notifications and update customers directly to persuade them with your latest offers and discounts.
3. Shot on iPhone (UGC campaign)
Apple’s #ShotoniPhone UGC campaign has evolved into a yearly campaign owing to its huge popularity among users. The brand asks followers to share images shot through their iPhones on Twitter and Instagram with the hashtag. Winners have their images prominently featured on Apple’s billboards, print posters, ads and video content, and also in their retail stores.
What you can learn from this program: Who doesn’t love a good reward? The chance to get featured for your creativity on Apple’s many sites seen by millions of people around the world is an irresistible incentive for Apple users. Plus, it’s super easy to participate; all you need to do is take a picture! Think about creating contests where users can share content featuring your product.
Offer a reward to the winners. The most attractive reward is having your name displayed on the brand’s creatives. But you can also look at additional incentives like brand swag or discounts and upgrades for the winners.
Encourage people, through incentives, to sign up for your app, so consumers have a more direct way of engaging with your brand. Through apps you can send notifications and update customers directly to persuade them with your latest offers and discounts.
4. Outdoor Voices (B2C referral program)
The Outdoor Voices referral program leverages the power of friendship. Real friends always want the best for you. If they’ve discovered a great deal, wouldn’t they want to share it with you? Bear in mind though, that this strategy works the best when it’s a win-win deal. Outdoor Voices leverages this strategy: the friends get a great deal, but the existing customer gets a reward too for taking action to promote the brand.
What you can learn from this program: Leverage the power of relationships while marketing your referral program. Talk about how a customer can help their friend benefit by signing up for the program. In the process, highlight how the referring customer gets benefits too.
5. GetResponse (B2B referral program)
Get Response’s referral program landing page shows off the tiered version of a referral campaign. The online marketing brand offers a very specific benefit – a free digital marketing certification course for inviting three friends (who sign up to a paid account). Additionally, both the referring customer and the referred friends get a $30 credit to use toward future payments.
This incentive is hugely attractive for people who want GetResponse’s courses for free! Borrow this strategy if you’re targeting a specific customer base, for example, customers who may have expressed interest in a course like this.
What you can learn from this program: Design a referral program where the benefits are tailored to what your top customers want. Targeted offers can provide great returns, provided your research backs up the level of interest. Do your homework and ensure your incentives for signing up are just what your customers are looking for. And if you want to offer a bigger incentive like a free course, it’s best to require more than one referral in a tiered scheme.
6. ZOX (update email)
ZOX packs a lot in the email campaign we’ve featured here. There’s a hello section, a product release update, an event update (with a gift incentive for people who attend the event and stay till the end), and a promo for a charitable collaboration with another brand.
Update emails don’t always have to be about selling the latest deals – that can quickly become a turn-off for your customers.
Instead, use emails to also touch base with your customer, share what’s happening behind the scenes, or offer free goodies for engaging with the brand. They can make the customer feel at one with the brand.
What you can learn from this program: Look at customer marketing as a relationship-building exercise. You want to check in with your star customers regularly, offer freebies, and actively seek engagement. Customers are more likely to stick to your brand if you’re constantly top of mind and love to keep in touch!
7. Coconut Lane
Coconut Lane specializes in “Instagrammable” tech and lifestyle accessories. For this campaign, they’ve focused on using early access with a discount coupon to boost sales. Early access to a select group of people taps into exclusivity, making the customers feel like they’re your brand VIPs.
What you can learn from this program: Reward your most loyal customers with early access to deals and offers. By putting a time limit or redemption limit, you can add a sense of urgency, so customers feel compelled to shop before the deadline for fear of missing out.
Also, talk about why you’re giving out an early access offer. In this example, Coconut Lane’s celebrating a milestone – achieving 250,000 orders – and they want to celebrate the achievement with their most prized customers. Inviting customers to share in the celebrations creates good vibes all around.
8. Chewy (asking for reviews)
The pet brand Chewy proactively asks for reviews, which they then feature alongside products. Asking for reviews also helps the brand understand if customers have any concerns or issues with a given product.
It’s a good idea to source reviews for your site if you’re confident that you have a solid product. You ideally want to do a trial run of products to gather feedback and refine your product before you launch to the market and start soliciting publishable reviews.
What you can learn from this program: Get ahead of the curve by proactively sourcing reviews and feedback from customers. In this example, the brand has used marketing software to trigger a review request email at a set time after the product was received by the customer. Send an email too soon, and it will annoy the customer because they haven’t had the chance to experience the product. Send it too late, and you’ll miss out on the momentum.
Think about incorporating software so activities like this can be set up to run automatically in the background.
Customer marketing, done right, can be a great way to build strong relationships with your most devoted customers. When using customer marketing, you also get to expand your reach with minimal marketing spending because your customers essentially do all the work for you. The best part? Your customers will keep sharing you with their networks because they genuinely love your brand.
Use this guide to inform your strategy and develop a great customer marketing campaign that works efficiently and delivers fantastic results. Remember to focus on driving advocacy, not just customer loyalty!