Whether we're entering an official recession or just an economic lull, it's clear that most US marketers are in for at least a slightly rough ride for the next 24 months. That's OK, when the going gets tough, it gets my blood up. I hope you are the same way!
Over the next few weeks I'll discuss tactics you can use to ride out the storm. First up: establish two current customer benchmarks.
During a recession happy, loyal customers are incredibly important. During good times, you can market your heart out to land new accounts. Pluck that new fruit. In bad times, the branches raise themselves up. Landing new customers is harder - more expensive -- just at the time when your CEO holds that "How can we cut marketing costs?" discussion with your department.
Your company's profitability for the next two years nearly certainly rests in the hands of people who are current customers. They are more likely to buy than anyone else. The cost of selling to them is likely to be lower than to anyone else. They are also far more likely to refer prospects who are likely to become new accounts than any other media you can market through.
If you have not already established benchmarks, measuring your current customer base, now is the time to do so. At the very least, you'll have data to benchmark your own performance against in future months when hoards of new clients may not come knocking at the gate. You can say your marketing has helped current profitable accounts stay alive longer, refer more prospects, buy more products or services.
Measurement can be as complex as you like it, but the basics are:
-> Step #1. Segment your customer base Chances are certain customer segments perform far differently than others. You may chose to segment by your most and least profitable accounts. Or by accounts in certain countries, or by industry, or by total units sold, or by lifetime. You may want to study multiple types of segments at the same time. The key is, it must be a segment you readily identify and sort your database -- or spreadsheet -- by on an ongoing basis. It must also be a segment you think you could affect with a campaign of some type if you want to make an impact on that one segment.
-> Step #2. Lifetime length and value Next, for each segment, you'll want to measure median account lifetime length and value -- in terms of profitability as well as overall sales. (Median is always better than average which can skew too easily.) These are the benchmarks you'll continue to re-assess over the next 24 months to see if anything has changed. They are also values you can use to decide which segments to continue marketing aggressively in for new accounts and which to cut back on for the time being.
-> Step #3. Satisfaction and likelihood to refer and/or continue Finally, ask customers directly to rate their account satisfaction, if they are likely to continue being customers, if not can you change anything that would make then stay on, and if they would be likey to refer you.
I strongly suggest that you don't ask customers directly unless your brand has a very high reputation for trust and honesty. Most customers do not want to tell you bad news directly. They'll lie with blandness or they'll say, "Sorry but my budget was cut," instead of telling you they really resigned the account. However, they are often willing to tell a third-party researcher the cold hard truth in vivid detail. So, hire a third party.
Now you know what product or service changes must be made to save current accounts, and who you can count on for the long haul. You will almost certainly be surprised by some of your top customer's answers.
By the way ... never ever allow anyone to contact accounts without getting buy-in from the sales department or accounts services department beforehand. And warn customer service to boot. Now is not the time to ruffle internal feathers!
The views and opinions expressed in the articles of this website are strictly those of the author and do not necessarily reflect in any way the views of MarketingSherpa, its affiliates, or its employees.