One good customer leads to another

Dun & Bradstreet's General Manager of Sales & Marketing Solutions, Peter Todd, discusses the hidden benefits of your existing customer base

The one adage that all businesses adhere to is 'know your customer': find out who they are, where they are, what they are looking for and hopefully identify a gap that needs filling. A lot of effort is expended during the eternal search for new customers and businesses are forever in the process of seeking that new lucrative lead.  But how well do we really know our current customers, and are we taking the time to do so?

For some businesses, 'marketing' amounts to nothing more than sending out blindfolded messages that have to somehow find their way to a customer that will listen. rsz_image1.jpg

However, marketing messages without a clear target are simply not worth the effort; saturating the market with your message in the hope it may reach the one or two percent who will actually absorb it is a waste of company resources.

Misdirected marketing is a recurring issue for businesses, and none more so than larger organisations that are often pitching to a highly saturated and increasingly savvy audience. Moreover, advertising and marketing campaigns are expensive endeavours through which it can be difficult to guarantee or quantify the return on investment.

On the other side lies the aggressive and targeted marketing strategists, armed with a meticulously researched and targeted approach aimed at securing the 'perfect catch' - a loyal client with solid repayment histories and a desperate need for your services. This is what drives most business models and is perhaps the most tangible benchmark for success beyond the revenue it eventually generates.

Acquiring new leads is also a common route taken by aggressive marketers. New customers are a vital component of continued success and respective market competitiveness. Once this new lead is secured and the contract signed, that signals time for the aggressive marketer to move on to the next big lead. 

What both these approaches neglect are the resources already on the books, and the untapped revenue they represent. The client with which you already have a relationship with represents a marketing opportunity of a different kind - first and foremost because most of the hard work has already been done for you.

Your present customer base has already taken the time to commit to your product or service. They have established a relationship and even a rapport with your company and its products, and are clearly happy with the services you provide.

During periods of slow economic growth amid increasing consumer deleveraging and conservatism, businesses need to ensure they are making the most of every existing customer. For the foreseeable future, the savvy business will shelve the days of wining and dining prospective clients in favour of a deeper understanding of their existing customer assets.

Understand the market in which you operate

While many businesses desperately want to understand their customers, they are restricted by the minimal amount of information they have on these customers. Many businesses are looking for information on prospective clients, but at the same time, do not think to obtain a profile of their existing customers.

Reinvigorating dormant customer behaviour stems from understanding their needs and spending patterns, particularly what they will buy more than once.

The key is to target the right industry, geographical region and business size and individual prospects within those segments in order to get the most money for your efforts. Some firms may want to conduct market research on consumer sentiment and business expectations to derive a bigger picture of the financial market.

Currently, a third of Australians are struggling to meet their credit commitments and less than that are expecting to make a major purchase in the next three months. This paints a picture of potential financial distress that may prompt businesses to change their marketing strategy.

Here are some questions you may want to ask of your business:

  • When do your customers buy your products? Are there any particular months such as the holiday season?

  • Where do they buy your products? This will help you determine if selling online, in-store or through sales representatives are the best options.

  • Where are your customers based and what type of community do they live in (urban, suburban)?

  • How much would they pay for your product?

  • What is the occupation and education level of your customers?

  • Why do they buy your product? Is there a specific want or need?

  • Are there any further opportunities in the market segments where your performance is the strongest?

Understanding what drives demand for your goods or services is crucial for any company, particularly for service-oriented firms, which brings us to the following strategy.

Understand your customer's wants and needs

It can seem near impossible to determine the nature of your customers' wants and needs unless you engage in a door-knocking or telemarketing strategy, but this can amount to a lot of effort for most businesses, particularly for large firms with a variety of customers.

Many organisations want to reach at least a portion of the 1.1 million small businesses in Australia, but are unsure of how to do so because of the lack of complete information on the sector- more than 60% of SMEs are unincorporated entities.

This can often make it a 'trial and error' process for larger businesses wanting to target small businesses, but the solution is usually as simple as segmenting and profiling an existing customer base.

Past behaviour is often predictive of future outcomes, and identifying trends in past client behaviour makes mapping their changing requirements and needs easier.   

Many firms are tentative about reapproaching clients, but a firm that has clearly taken the time to research and personalise an approach from a fresh perspective will impress.

And for marketers whose old sales habits die hard, your time has not been spent in vain. Deeper knowledge of your existing customers helps identify and keep track of the changing marketplace; and improved segmenting and meeting the needs of a present customer base means better targeted marketing in the future.

Learn more about D&B's sales and marketing services here.

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