Answer: More often than you think.
Question: How often should I send marketing messages to my current and recent clients?
In How to Market Training and Information, Don Shrello wrote:
Regardless of how often you contact your clients and prospects (those who have already…purchased something from you) you're probably not contacting them enough.
When I was mailing to my own customers four times a year I thought I would "wear out my welcome." Years later when I was mailing to my client list every 5 days (yes, that's right, over 70 times a year!) I was surprised to learn that each mailing was still profitable.
Although I read these words years ago, I was reminded of them recently while reading the article "Getting the Most out of All Your Customers" in the Harvard Business Review. It analyzed, using fairly complex mathematical methods, the marketing spending of, among others, a major business-to-business service firm.
One major question the authors asked was, "How much of a firm's marketing dollars should be spent on new client acquisition versus how much should be allocated to current client retention?"
While they had no silver-bullet answer, they did imply that it should be a significant portion of the marketing budget.
As I read those lines, I was struck by the following thought: many of the service firms I meet spend a goose egg, or close to it, on retention marketing.
Why Market to Current Clients
When conversations at service firms turn to marketing, new client acquisition tends to top the agenda. "How can we get more new clients?" service firm leaders routinely ask. Retention marketing never seems to come up.
But marketing to current clients should be front and center in any service revenue generation discussion.
Consider the following:
- The financial effects of retention: Although many service providers initially boast, "Oh, we have practically no client turnover," upon further examination they understand that they do lose clients for one reason or another. If there's something you can do to increase the odds that a current client will stay with you, you should do it. It typically costs much more to acquire a new client than it does to retain an existing one. Spending on retention tends to have a very positive financial effect on your firm.
- Your walletshare: Most service firms have a variety of service offerings, but not all clients buy all offerings, nor do they buy them all from you. The service pie may actually be divided among you and many other firms. In financial services, your piece of the pie is called your "walletshare" of the client's total buy.
When it comes to generating leads for services, the most likely respondents to a marketing campaign for new services are satisfied clients of existing services. But you can't get their walletshare if you don't let them know that you have other services to offer.
Marketing can be a great resource to you if you'd like your current clients to remain your current clients, and if you'd like to sell them more services than they're currently buying.
What Marketing Can't Do
First, let's be clear about what marketing to current clients can't do:
- Improve service quality and satisfaction: Marketing doesn't materially affect how good your services are. If your retention rate is low because your service isn't up to par, you'll be disappointed with the results of any retention marketing campaign.
- Create inherent service demand and value: You may provide one service to your current clients that they think is amazing. You want to sell them a new service, but no matter how good the marketing is, buyers simply won't buy it. The service may be behind the times, or ahead of its time. It may be too difficult to buy, or too difficult to understand. Marketing can effect demand creation, but the service itself needs to be inherently desirable and competitive for marketing to be most successful.
What Marketing Can Do
But marketing to current clients can do the following:
- Uncover ways to improve satisfaction: Through your marketing, you can solicit feedback from your clients. Although most people think of marketing as some form of direct solicitation for a service, the marketing itself can actually focus on improving client satisfaction through vehicles such as surveys. When you survey clients, you are communicating to them that you want to be as good as you can be. This is good branding for you, and the feedback you get can be invaluable to improve your services across the board and to fix satisfaction issues with current clients.
- Make the value case: The service you provide may be new to the market in general, or new to a particular buyer. Clients may not know that it's available or why they need it. Good marketing can draw clients into a conversation about the new service and help you make the case for why they should buy it.
- Keep mindshare (and walletshare) high for current services: With your current clients, two things are always happening:
(1) If you're not in front of your clients, they're not thinking about you—they're focusing on the challenges of the day
(2) your competitors are trying to get your clients to switch from you to them. To make sure your clients continue to think about you, keep your messages in front of them when you, physically, are not.
- Generate leads for new services: If you have multiple services you want your clients to engage, one of the best ways to let clients know about them is to tell them, over and over, through marketing. The most likely buyers of new services are satisfied buyers of current services.
I understand why many service firms equate marketing with acquisition of new clients instead of retention and cross-selling of current clients. It's natural to want to add new clients to the fold. However, don't ignore the revenue growth and profit potential from your current client base. They already like you, and you already know that they buy.
Maybe you won the client last week. Maybe the client has been with you for 10 years. Either way, make sure you're still marketing to them. How often? More often than you think.
Continue reading "You Won the Client! Now Start Marketing" ... Read the full article
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