The trouble is that most businesses and their leaders don’t seem to fully appreciate the value of long term customer relationships. “New” customers sound more sexy than “Old” customers. On a lighter note, Tinder sounds more exciting than eHarmony. Our marketing academic audience knows about the 1987 seminal work by Dwyer, Schurr and Oh where they famously developed their theory based on the sociology of marriage contrasting the “one night stand” (eg.Tinder) vs a “long term marriage” (eg. eHarmony). Ages before the Internet. Those interested can access the full text of their 1987 paper Developing Buyer Seller Relationships.
To summarize, your old customers pay your current bills. New customers will hopefully pay future bills as your business grows.
STRATOSERVE
Every prospective customer is on a journey to purchase. And once you have figured out your market segment and target market, you need to meet the customer where they are at. Think of the old sales funnel ( or Purchase Funnel, AIDA model , attributed to American Advertising Advocate E.St. Elmo Lewis in 1898). In the 19th and early 20th century the Sales Funnel was used in personal selling and in traditional advertising. Today variations continue on all forms of digital advertising including Google Ads, Facebook Ads etc. B2B marketers bemoan the “long” sales cycle and B2C keep reworking everything from product, price, place and promotion (4 P’s of marketing) trying to double guess the consumer and competitors.For only a paying customer produces revenue that keeps the business running. Once there is a paying customer that customer enters the CRM (Customer Relationship Management system) of the business. This customer has a transaction history which helps in all kinds of Customer Lifetime Value (CLV) and RFM (Recency, Frequency and Monetary value) techniques that we will cover in later posts.
Because businesses should care deeply about their existing customer data, this post explains the connection between Customer Journey,CRM and Advertising Goals.
This post takes the three goals of advertising and maps them into the three stage customer journey typically used in Google Ads certification training. And finally we connect the kinds of first party data that the CRM can collect.
Awareness in the Sales Funnel maps to Inform in Advertising Goals -but can’t be usually captured in CRM
Once you have identified the most appropriate segment of the market you are targeting the Marketer must build awareness of the brand. If the target market is not aware of your brand: nothing happens. You are trying to reach the first goal of advertising. viz. trying to inform the customer. A cold database is strongly discouraged legally (CAN-SPAM) except if you are reaching out to members of a group whose emails are available publicly and you are also a member. It’s usually fine for a small business that is member of a local Chamber of Commerce to email other members from the membership directory available online. In such cases the email open rate, click rate are important indicators that your Awareness/Inform goals are getting reached. In both Google and Facebook advertising you really don’t know the contact details of who saw your display or video ads.
To summarize, except for email marketing you really cannot know who individually is becoming aware of your brand. It is thus hard to capture awareness data into your CRM.
Consideration in the Sales Funnel maps to Remind in Advertising Goals and can be usually captured in CRM
A customer in your target market can enter the consideration stage once she is aware of your brand. That is why reminding is so important in advertising to move the customer on the journey to purchase. Online, customers who are considering might fill up a contact form, newsletter signup and these names can be added to your CRM. Also if you are working off a cold email list (particularly in B2B) high open and click rates indicate consideration and it is good to try and call the person to set up a meeting. Remember an initial presentation in a B2B sales meeting is still in the consideration stage or the sales pipeline. In social media Facebook or LinkedIn does not make it easy to find the contact details of the people who liked your post. Unless you are a direct connection with that individual. In any case, we find that most people don’t seem to have their contact details on Facebook or LinkedIn. And yes they have their contact details with the social media platform and you can advertise (and pay!) to reach those who “liked” your brand on Facebook.
Customer Journey to connection with your brand: This connection to your brand can take two forms . Through social media and through a contact form:
- Connecting through social media: The customer may not have bought your brand yet but has entered the consideration stage of the funnel. She might be a public supporter by liking your Facebook, YouTube Instagram, TikTok or other social media posts. By publicly acknowledging your brand the potential customer is sending a social message to her own online social connections. Connecting with all these supporters through a CRM system is a little complex and we will explain in a later post.
- Connecting through a contact form: The web contact form or a newsletter signup gives you enough (first party) data to add the potential customer to your “Potential Customer” segment in your CRM. Now these interested folks can be part of your email marketing campaigns.
Let’s face it. Your data ( called first party data in today’s age of data privacy ) in your CRM or your Customer Database is your single most valuable marketing “tangible”asset. First they give you a chance to serve existing loyal customers better and earn a larger share of their “wallet”. Second, using your CRM data and some simple analysis you can deploy digital marketing far more effectively. Third, for both small and large businesses your “book of customers” is an important part of the valuation of your company for acquisitions and mergers.
Purchase in the Sales Funnel maps to Persuade in Advertising Goals and MUST be captured in your CRM
Past customer transaction data is your most valuable marketing asset. It tells you what the customer actually did that directly spoke to your bottom line. It help you build loyalty programs and have tiered approaches for different customers. These are the levels of loyalty rewards you see commonly in airlines, hotels, stores. There is huge opportunity to improve these programs and is one reason for high demand of marketing analytic skills.
CRM systems are available from many software suppliers. They can include activities like email marketing (B2B prospect lists) and the data can be integrated into the Financial Systems through ERP (eg. Oracle,SAP). Some functions like Call Centers are outsourced simply because the marketing leaders seem to be rewarded more for new customers rather than for providing excellent services (now called Customer Success in the start up world). We do not find much evidence that all the customer call data is integrated back into the CRM system despite software solutions out there. Once a customer becomes loyal due to an excellent experience they spread the word (word of mouth ) and can become Net Promoters, see Net Promoter Score-NPS ). The good word can be turbocharged in a social media world. It turns out that (a) You do have your customers historical data of purchases (b) You are not using that data to find customers like those customers you already love. The customer database can be analyzed in a variety of ways including the old direct mail way of Customer Lifetime Value (CLV), and Recency,Frequency, Monetary (RFM). We’ll cover more of these topics in later posts.
A customer who pays and buys is the ultimate proof that the marketing worked. However, you are never 100% sure which specific action in your marketing really helped in moving individual customers along the journey.
But that is why marketing is so interesting!