Now that an economic slowdown is in full swing and the potential of a recession looms, marketing departments are "full go" on adjusting their strategies to suit the conditions.
There's no better time to double-down on marketing to current customers. Some 46% of marketers focus on growing current customers or upgrading them to more profitable services during recessionary times, according to a study conducted by Sapio Research.
For example, many companies are shifting from "growth at any cost" through net new logos to a focus on profitable growth. And with that, customer lifecycle marketing (CLM) moves to the forefront.
Regardless of economic conditions, generating new leads and closing new deals is critical. At the same time, however, growth and retention is the best way to protect against attrition. Customer marketing results in increased net revenue retention (NRR), which takes into consideration retained, contracted, and expanded revenue.
How to Grow Customers in Any Environment
Forget about the environment around your company for a second. It doesn't matter whether the economy is booming or preparing for a recession, you always need a plan to land new customers while growing your existing accounts.
Here are some things to focus on.
1. Customer segmentation
No two customers are the same. Take a unique approach by looking at the revenue, revenue potential, and overall profile of every customer. Doing so helps you pin down the information you can use to segment your audience.
Segmentation can be based on data such as...
- Levels of spend
- Renewal dates
- Product uptake
- Marketing engagement client satisfaction
Guided by that data, your primary objective is to answer the question, "Who will be your best customers over the long term?"
Your answer is based on two details:
- What the revenue potential is
- How the customer aligns with your strategy
Then, through propensity modeling, you can identify the customers who are most willing to expand their scope of work. That approach allows for more targeted customer segmentation, which increases the likelihood of improved NRR.
Upselling is a sales technique for persuading customers to purchase a more expensive product or service, which results in more revenue from the customer.
Building an upselling foundation starts with reinforcing the work you're already doing within the account. Review your processes and performance to date. Answer questions internally and ask your customers for feedback as applicable.
Here are some tips for upselling:
- Choose a relevant product or service to upsell. Without that step, you have little to no chance of success. You know your customer's wants and needs, so choose a product/service accordingly.
- Don't be pushy. A pre-existing relationship doesn't guarantee anything. It's OK to gently nudge customers to expand their scope, but crossing the line can result in downgrades and greater churn.
- Use social proof, such as case studies and testimonials, to show customers how others have benefited from an upgrade.
3. Use behavioral science
You don't have to be a psychologist to use behavioral science to your advantage. Although behavioral science alone won't transform your strategy, it can help grease the rails of the customer journey to reduce perceived risk and friction in the sales process.
For example, the use of social proof from peers and colleagues to build trust and accelerate the adoption of a SaaS solution delivers a better experience and helps to close more sales by showing how software boosts productivity.
Use behavioral science to help "customer champions" sell internally by targeting stakeholders with enablement materials that show how a solution is working effectively in one area of their business, such as IT, and how it can cross over into other departments, such as Customer Service or Finance.
By doing so, you give current customers everything they need to close new business on your behalf.
It's Time to Be Proactive
Forget about whether or not we're in a recession and how it could affect your business. You must be proactive, not reactive, when expanding revenue through your current customers. Keep your focus on that.
Put the wheels in motion by...
- Using customer segmentation to target the right audience
- Taking advantage of upselling opportunities
- Making behavioral science a key part of your overarching CLM strategy
Upgrading current customers allows marketers the opportunity to demonstrate their value. With that, the revenue will follow.
More Resources on Customer Marketing
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