How to Develop a Profitable Customer-Led Marketing Strategy

Customer marketing allows businesses to nurture existing customer relationships and leads for long-term business growth. For that reason, it’s important to develop a strong marketing strategy that reaches out to the right customer base and identifies ways to reduce churn.

What is customer marketing?

Your business already has customers, and making the most of them is key to a great return on investment (ROI) in marketing. Customer marketing is designed to focus your efforts directly on those that are already buying from or interacting with your brand. Your goal isn’t to get new prospects but instead to engage the audience you already have.

Unlike traditional marketing, customer marketing helps improve loyalty, encourages retention, and can even foster a community of target audience members who can interact with one another. This kind of consumer marketing is inclusive and inviting, and it also reduces costs associated with lead generation.

Why is customer-led marketing important? 3 Benefits

Customer marketing matters for multiple reasons, not the least of which is that it’s cheaper to keep current customers coming back than it is to entice new customers. Here are some reasons you need to consider customer marketing strategies to re-engage your current customer base:

Boosted Customer Retention

Boosted customer retention rates and reduced churn are corereasons to implement a customer-led marketing strategy. It not only saves you money, but it also drives more revenue as existing customers are likely to make repeat purchases and spend more per purchase.

Increased Customer Loyalty

With a strong marketing strategy that considers your customer base, you’ll increase customer loyalty. By emphasizing the importance of your current audience and customer base, you’re more likely to increase the length of time customers buy from or work with you.

As you think about your customers’ needs, ask yourself what you can do to help them with current issues, prevent or address problems that might arise in the future, and provide the highest level of customer service along the way. Increased customer loyalty saves your brand money on marketing in the long term, leads to referrals, and improves social proof.

Here’s an example: If Tim has been a customer for three years and sees that you offer a solution beyond what he has used before, he may reach out to you. That new product, which you’ve marketed to someone who previously used your products, has driven repeat business.

Later, after Tim tries the product, he finds that it is a great solution for people in his field. He starts to talk about it and refer others to your brand. He makes a video about it on social media, too. Now, his satisfaction has driven additional referrals your way and built social proof.

Enhanced Customer Lifetime Value

A customer’s lifetime value, also called CLV, is a metric businesses use to measure the overall profit they can gain from a single customer at all stages of the customer relationship. Brands that have significant customer churn will find that their CLV is low, but brands that place an emphasis on customer advocacy, support, and an excellent customer experience tend to see a high CLV.

Customer lifetime value is important as a key performance indicator for your brand. It helps you identify which customers are most important to your brand and how you can serve them better. A high CLV means you’re hitting all the right notes with your consumer base, which results in more revenue for your company over time.

When you build your marketing strategy, your marketers should consider the current audience and how you can keep pulling them back in for more. Whether you’re selling products like clothing and technology or have services you render to homeowners, show them why they need to keep coming back to your brand.

5 Tips To Develop a Customer-Driven Marketing Strategy

Once you’re ready to create a customer-driven marketing strategy, there are a few elements you’ll want to emphasize along the way. Some ways to help guarantee customer success through consumer marketing include:

1. Prioritizing the Customer’s Experience

Most customers don’t return after just one bad experience. So, ensuring you’re providing the best possible experience from the first moment a customer interacts with you is absolutely crucial.

A few of the things you can do to improve the customer experience with your brand include sending welcome emails, personalizing marketing content aimed at specific target groups, adapting an omnichannel approach to meet customers however they want to interact with you, referring customers to community forums or social media pages to connect them with like-minded people, and rapidly responding to any interactions with customers you happen to have.

2. Leveraging Customer Advocacy

Developing brand loyalty is another way to help grow your business while also reducing churn rates. You can do this in many ways ranging from loyalty programs that give back to your best customers to encouraging the creation of user-generated content (UGC) that builds a more authentic brand through user reviews.

75% of consumers believe that user-generated content feels more authentic, which means relatable UGC from loyal customers could help you acquire new leads at little or no cost to you. That’s a win-win for your marketing team.

3. Listening and Responding

When your customers make a statement—good or bad—it’s in your business’s best interest to listen. And, not only that, you should also be prepared to respond to what they’ve had to say.

Listening and responding to your customers is critical to your long-term success. It can be as simple as reiterating a success story and posting it on your social channels to showcase it. Other times, it can involve responding to a customer complaint or negative review, which makes for a great opportunity to provide an even more meaningful experience. It will build trust and loyalty as your customers feel heard and valued.

When you celebrate success and take responsibility for failures, your brand helps your customers realize they can rely on you. Your marketers can also take advantage of what you learn from customers to build a suitable marketing strategy.

4. Personalizing Your Approach

When you see an ad, you’re less likely to click on it if it’s not personalized to you. Personalization, whether that includes using your first name or local area, can make a big difference. It shows that a company isn’t just sending out a massive ad campaign but is instead taking the time to personalize it for you.

As part of consumer marketing campaigns, your brand should pay attention to personalization. It shows your customers that they can trust you. Personalization also shows that you listen to what customers want from your brand and approach them with the kinds of products they want or services that can resolve issues in their everyday lives.

5. Investing in Retention

Another customer-driven marketing strategy is to focus on retention. Retention, the ability to keep customers you already have, is an excellent way to improve your marketing ROI. Marketers should not ignore the importance of customers who are already interacting with the brand or making purchases. Even those who don’t buy directly from the brand could effectively refer others to your business.

Keep the customer experience of excellent quality to improve retention rates. To do so, emphasize ongoing and personalized engagement. Additionally, responding to customer inquiries or complaints as quickly as you can is also crucial. Using automation or artificial intelligence (such as Podium’s AI Employee) can ensure your customers are taken care of.

5 Key Metrics To Assess Your Customer Marketing Strategy

Many metrics allow you to see how well your marketing strategy works for your brand.

• Look at the Customer Retention Rate

The customer retention rate refers to how many customers stay with your business rather than purchasing once and moving on. Using consumer marketing tactics that focus on retention helps you retain your customers longer, which in turn positively impacts a customer’s lifetime value (CLV).

Customer retention is absolutely crucial, but it doesn’t have to be daunting. Simple changes, such as adding a reward program, creating a community for people who like your products, and providing useful content and information, can make a difference. It’s about making your customers feel valued.

• View Customer Churn Rate

Customer churn rate is an important metric to keep an eye on as you work on improving your customer marketing strategy.

Customers churn for numerous reasons. They may decide to move to another brand because they don’t like changes in your products, have developed other needs, can get a better rate with the competition, or simply can’t afford what you offer anymore.

It’s important that your marketing team keeps track of the customer churn rate and starts asking questions if it increases. For example, if you see the churn rate skyrocket after a price increase, your brand may need to consider changing the target audience or reducing the pricing enough to get people back on board with your products.

• Evaluate Customer Lifetime Value (CLV)

Customer Lifetime Value (CLV) is a metric commonly used by businesses to look at the total value of a customer over their time with the brand. For example, if a customer decides to shop with a clothing retailer over a period of 10 years, the CLV would determine how much that person’s relationship with the business would be worth (or was worth) during that time.

The nice thing about determining the CLV is that it shows you the complete value of a singular relationship, and that value can be used to estimate the value of additional customer relationships. And, by understanding which customers have a higher CLV, you may be able to narrow down your marketing efforts when you’re ready to look for new leads.

To get the total CLV for a customer, you can use this formula:

CLV = Average Transaction Size x Number of Transactions x Retention Period

• Understand a Customer Satisfaction Score (CSAT)

Another metric you may want to keep in mind is the customer satisfaction score (CSAT). The CSAT score looks at how people feel about your brand or business. Customer satisfaction scores are based on a simple 10-point scale, letting you see how your brand is doing overall on a scale anyone in your business can understand.

Getting a 10 is the ideal; however, the reality is that most businesses won’t get a perfect rating.

Rather than being unhappy about a score that is less than 10, take the opportunity to discuss how you can improve with customers on social media or through surveys.

• Earn a Better Net Promoter Score

Another helpful score you should also be monitoring is your brand’s net promoter score. The Net Promoter Score, or NPS, tells you if your customers would be happy to refer your brand to others. Like the CSAT, it will give you a score from 1 to 10, letting you dig deeper into what’s really going on in the minds of current consumers.

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Learning more about your customers is an essential marketing strategy. With Podium’s AI Employee, you have an extra set of hands that can provide an exceptional and personalized customer experience to help you drive repeat business. Watch a demo to see how Podium’s AI Employee can work for you.