The idea that connecting with your existing customers is more valuable than just trying to collect new ones is something we all kind of inherently know even if we don’t have the exact numbers behind it. But for a lot of small businesses who have to make the most out of every dollar in their marketing campaigns, it can be difficult to find effective, budget-friendly ways of reaching this segment. There are some tactics, though, that can make a difference without breaking the bank.
Why Market to Existing Customers
The ROI from Marketing to Existing Online Customers, part of the Adobe® Digital Index Report, broke down some of the numbers behind marketing to existing customers:
- In the U.S., 40% of revenue comes from returning or repeat purchasers, who represent only 8% of all visitors
- Marketers in the U.S. must bring in 5 shoppers to equal the revenue of 1 repeat purchaser
- Repeat purchasers account for even more revenue during the holiday season and times of slow economic growth
In the report, they note that a much smaller percentage of digital marketing budgets are suited for marketing to returning and repeat purchasers.
The average retailer spends more than US$20 million annually on interactive marketing to persuade prospects to visit its websites, explore its product offerings, and make purchases. Because only a small fraction (approximately 1%, See Table 6) of these prospects actually purchase, retail marketers spend the bulk of their digital ad budgets acquiring new visitors. (page 3)
In contrast to new customers only seeing conversion rates of 1%, returning and repeat purchasers have conversion rates that are five and nine times higher, respectively.
How Your Small Business Can Market to Existing Customers
Start With Understanding Your Customers
You can’t market to people you know nothing about, so your first step is collecting the data you have on your existing customers and clients in order to create a better understanding of who they are. Not just age, gender, and income, but also their purchasing and shopping behaviors, what you can discern about their lifestyles and motivations, and what they might have in common. All of these aspects can help inform the rest of your tactics.
Follow Up Post-Sale and Ask for Feedback
One of the best ways to start a customer relationship is to follow up with them after the initial sale after a week or two to check in with how they are feeling about their purchase. Ask for and engage with their opinions and feedback and use it to inform next steps and changes. If these customers can see that their answers are really being listened to, that can be a huge component of building brand trust. Come back to these returning customers to get input on new products and services, and encourage them to leave honest reviews.
Create Highly Focused Content
Your existing customers can and should drive a targeted content strategy. From their data, their behavior, and their feedback, you may find that there are reoccurring questions and topics that come up time and again. You can leverage those trends to drive a campaign of blogs, social media posts, articles, and potentially third-party link building.
Set Up Customer Loyalty Programs
Everyone loves getting something extra, which is why customer loyalty programs are popular. The type of loyalty program varies from business to business, but it can involve tactics like:
- Stacking small rewards that eventually add up to larger ones
- Tie purchases to shared values by linking a percentage of their purchases to particular charities
- Offer exclusive discounts and freebies for multiple purchases or particular products
Keep the process simple and easy to use so that it’s easy for your customers to sign up and participate.
Set Up Personalized Communications and Recommendations
The data you gather on your customers should directly influence your communications with them, particularly with email marketing campaigns. We’ve discussed before how important it is for small businesses to personalize their email lists, and it’s an extremely effective tool for staying connected to your customers. Based on their shopping behaviors and purchases, you can keep them in the loop on new developments, offer them recommendations that align with their needs and interests, and even call out and celebrate their special days, like birthdays, so they feel understood and seen.
Host Customer Appreciation Days or Other Events
This one might be a little more costly or resource-dependent than other tactics on this list, but hosting a special live event can work on multiple levels. Customer appreciation events can help demonstrate how much you value your clients and build brand reputation and loyalty, but it can also serve as a launchpad for new products, additional sales, and feedback collection.
Run a Reactivation Campaign
If you haven’t already been maintaining a connection with your existing customers and/or if you’ve had customers who have fallen away, a reactivation campaign can bring a new infusion of energy into your marketing. This often looks like a series of emails with messaging tailored explicitly to people who previously connected with your brand but have ghosted your communications in recent months. If you can re-engage even a handful of these customers, it can pay off quicker and more effectively than trying to get customers who are brand-new.
Keeping the Customer Connections
Marketing to your existing customers can be one of the best uses of your budget, time, and resources. For any small business owner who is looking for guidance on building marketing campaigns that will keep their clients and customers engaged, connecting with a digital marketing partner can be invaluable. If you’re interested in getting started, contact us at EdwardsSchoen, and we’d be happy to discuss your needs and how the right media marketing mix can meet them.
