What is customer marketing?
Customer marketing is a department within businesses, usually positioned under marketing (though it can be housed in other areas, such as customer success, product marketing, and demand generation). Customer marketing is focused on the areas of marketing and management that pertain to a company's existing customer base.
The activities within customer marketing are specifically focused on increasing customer retention, customer advocacy, and overall company growth. Their aim is to build a long-lasting community of customers, and encourage their participation in business events and development.
Their skills lie in turning new customers into loyal ones, aiming to convert them by prioritizing the customer-business relationship.
What are the 4 types of consumers in marketing?
It’s important to understand and categorize your consumer base when considering your customer marketing strategy. Each group must be targeted differently as they all have different motivations, different types of engagement, and different mindsets when it comes to buying and/or using your services.
Loyal consumers often make up a smaller percentage of a business’ existing customer and consumer base. But they’re ones that’ll stick around, which is most important when it comes to retaining consistent revenue and growth.
These are, perhaps, the most important in regards to customer marketing. Loyal consumers are their area of expertise, not just in managing loyal consumers, but converting other types of consumers into loyal ones.
Like loyal consumers, discount consumers tend to frequent a handful of organizations regularly, but only buy during a sale season or when there are discounts available. Market to these consumers by advertising any discounts you have in the works; social media is a great way to keep in touch with these consumers.
These’re notoriously the most difficult consumers to pin down when it comes to focused marketing strategies. They tend to make a purchase on a whim with no particular brand or even product in mind.
However, the vast majority of purchases are impulse purchases, so they’re not a group to be overlooked. Customer marketers can help with this by analyzing the emotional nature of why your loyal customers came to your brand in the first place and apply that to impulse buyers. Advertising and messaging that focuses on emotional impact can get these types of consumers to buy.
Needs-based consumers are people who purchase products or services to fulfill a specific need. To correctly market to this consumer base, you’ll need to correctly identify and anticipate these needs.
This is where effective customer marketing can help other marketing departments - understanding the existing customer base sets customer marketers up with the knowledge of these needs based on customers' real-life experiences with your product.
What is the difference between customer and consumer?
So what’s the difference between a customer and a consumer? This distinction may not seem important, and, though the difference may be subtle, it’s vital to understand when looking at customer marketers and where exactly their role lies in the customer journey.
Put most simply, the customer is the one who purchases the product or service. A consumer is the one who uses it. These may be the same person, or may be several different people. We’ve highlighted the more important difference below:
- The customer purchases the product or service.
- A customer can resell the product or service for a profit.
- The customer could be an individual, a team, or a full enterprise.
- A monetary transaction must happen for the customer to receive the product or service.
- A consumer may or may not purchase the product or service, but is its end-user.
- The consumer cannot resell the product or service for profit.
- The consumer relates to a single person or a single company.
- For consumers, a monetary transaction to obtain the product or service is optional.
For example, B2B businesses. Most often, B2B businesses are selling to a customer who is not necessarily going to be the direct consumer of the product. In our recent State of Customer Marketing Report, we found that 96.4% of our participants were customer marketers for B2B businesses.
If you were selling a SaaS product that optimizes email marketing, you might conduct the sale through a leadership figure; for example, the Head of Content, a Chief Marketing Officer, or even a CEO. These will be your customers.
However, this email optimization tool likely won’t be used by these leadership positions (though they may use it, and be both your customer and your consumer). What’s more likely is that the teams working under them - the customer marketers, the content team, the product marketers, customer success - will be the ones to use your product regularly. These are your consumers.
How can customer marketing nurture your business?
While there are dedicated teams to the majority of the customer journey, customer marketing addresses an area most often neglected by businesses; existing and loyal customers. There’s a misconception that loyal customers don’t need as much attention or dedicated resources as new or churning customers do, but that’s simply not the case.
A lot of the customer marketer’s job revolves around improving sustainable growth for your business, in both size and revenue. Not only that, but existing customers are also a valuable source of information that can help elevate other marketing departments too.
A large part of their efforts goes into making successful customer conversions, turning one-time customers into returning customers, and loyal customers into brand advocates.
One such task is taking advantage of cross-sell and upsell opportunities. This refers to the act of advertising either a different product or an upgraded version of your product to your existing customers. This is done based on their purchase trends and habits.
The aim is to not come off as too ‘salesy’ and put your customers off. We’ve got a best practices guide if you’re interested in learning more.
Another key ingredient to the customer marketing cake is CRM, or customer relationship management. In essence, this is a strategy for improving how customers interact with and experience your brand.
There are a lot of ways to do this, and it’s a part of marketing that overlaps with other departments, such as customer success. CRM can be done through customer support by collecting customer feedback.
Using surveys, focus groups, and customer interviews, customer marketers use this data to monitor customer satisfaction and improve overall experience.
Another way to improve customer-business relationships is by informing your customers of your product through content marketing. This is the process of giving your customers access to learn how to effectively use your product. This reduces the chance of customers churning out of the customer journey if there is a learning curve that comes with using your services, and gets them invested in your brand.
Managing advocacy programs
We have a lot more on advocacy programs, but, at its basics, customer advocacy programs are about turning you customers into raving fans of your business.
In fact, this goes a long way to helping customer acquisition, which businesses tend to prioritize. Advocates are the ones who support and promote your business for you. They can be key figures in getting referrals, and are good sources for promoting social proof by participating in case studies and testimonials.
What does this mean for businesses?
Nowadays, there’s an overwhelming number of choices of stores, products, services and brands. How does a customer pick your product out of a sea of so many others? What makes yours so special?
Customers want to be able to make an easy, simple decision. If they’re too overwhelmed, they may decide to just leave without making a purchase. It's human nature to follow a routine and build habits.
Going with something familiar is a safe bet; customers know what they’re getting and know they’ll like it, so why would they choose something new, scary and uncertain?
Businesses should aim to increase these types of customers from the get-go. They should also foster relationships with them to ensure everyone’s getting the most out of it. How else can loyal customers help?
Higher chances of purchase
Loyal customers are far more likely to fully immerse themselves in your business and brand, and buy the new products and services that your business is selling. They take less convincing to buy due to their established trust with your brand and business.
Customers will dip their toe, maybe purchase a sample or a product, but they’ll only invest money into your business when they become truly loyal. Experience and familiarity are key. If a customer knows what to expect, i.e., excellent customer service, then they’ll know to choose your business. They won’t even think about going elsewhere if they believe they’ve got the best.
Saves money and time
When businesses try to acquire new clientele, they need to spend time getting to know and understand their new customers on a deeper level, and create a new buyer persona that’ll fit with the new target customer.
Time spent on this will take money away from other marketing activities. For start-up and mid size businesses, this is money that is better invested into your current customers who you already know will buy from you (you have a guaranteed revenue stream). There’s no certainty that a new customer will continue to purchase from you and your efforts would have been in vain.
Greater retention rates
Customer marketing is important to increase retention rate while lowering chances of churn. Having strong relationships with your customers is important for the success of your business.
Having a deeper understanding of your customer, as well as what they need and want, will help you to effectively target your marketing activities towards them. In turn, your customers will respond by staying loyal and keep purchasing from you as their needs and wants are fulfilled. They are less likely to go elsewhere.
Having loyal customers pays off big time! Loyal customers will shout their praise out to the world, telling friends and family about you and driving sales. Customers are more likely to take the word of a friend or family member as opposed to a business', which will be biased.
Use word-of-mouth marketing: These loyal fans will do the hard work for you and are far more likely to give you a genuine and dependable evaluation.
Why is customer retention important for your business?
Customer retention is more important than acquisition, which is both money- and time-consuming. The more loyal your customers are, the more they spend in your stores and less in your competitors'. Which is great news for your business!
There’s no doubt that businesses need new customers; however, in your pursuit for new clientele, it’s important to not forget the customers that are already regularly buying at your business.
These’re customers that have stuck by you and have become loyal fans, coming back time and time again, pumping money into your business, allowing it to grow and expand. They’re the ones that nurture your business to success.
With predictable customers, you get an almost fixed guaranteed revenue year after year. Strengthening your retention rate by as little as 5% has a significant effect on your profit margins, boosting them by another 70%.
It also doesn’t cost as much to invest in your existing customers compared to acquiring new ones. And having a fixed amount of money from your existing customers each year is important, as uncertainty can be deadly, like we saw during the COVID-19 pandemic.
Current customers, since they have grown loyal and trust your business as a whole, will spread their trust to other potential customers. They’re also a much easier way to pursue new business.
Types of customer marketing strategies
What is customer-centric marketing?
Customer-centric marketing is when you utilize your marketing activities to target existing customers. The entire focal point for your marketing campaigns is the customers that’ll automatically and predictably purchase from you.
Many businesses put a lot of their funding into customer marketing in order to boost customer retention, reduce churning, and elevate loyalty, advocacy and support.
This type of marketing is based on cementing strong, stable relationships with your customers. By utilizing what you’ve gleaned from your current customers, you can elevate retention which, in turn, helps to expand the business.
What is customer lifecycle marketing?
Customer lifecycle marketing focuses on personalization. It recognizes that different messaging and strategies work best for customers depending on their stage in the customer journey.
This style of marketing requires an intimate knowledge of each stage in the customer lifecycle, and how it fits in with the products and services you have to offer. Each stage will have different priorities, knowledge, and investment in your business.
What is customer engagement marketing?
Customer engagement marketing does a little of what it says on the tin; it’s a marketing strategy focusing on increasing engagement between your customers and your business.
While other types of marketing also have this aim, and some of their activities may be the same, this style of marketing is focused on accommodating a variety of ways customers can communicate with your brand.
This involves interacting with customers through email, your website, social media, community forums, etc. While most brands intend to engage with their customers, it’s often difficult for customer marketers to prioritize which parts of the business they should promote next.
An effective customer engagement marketing strategy will not only develop customer interest through storytelling and incentives, but will iron out any kinks already present in your system. It’ll show you when, where, who, and how you should be making these connections and can support the marketing process as a whole.
What will customer marketing look like in the future?
With businesses beginning to realize the importance of customer retention over customer acquisition, and how it can improve revenue from 25-95%, it isn’t a stretch to say that customer marketing will play an increasingly important role in how businesses run in the near future.
With insights from professionals in our customer marketing community, this article will go through:
🗝Customer marketing and its key responsibilities,
💰How resources and responsibilities might change for customer marketing,
⛓Customer marketing’s increasing link to revenue, and
✒️The specialization of customer marketing in organizations.