By Jill McCubbin
Emerging tech companies fight so hard for their first customers that sometimes there’s a delayed reaction to the idea of marketing directly to that hard-won customer community a second time. Yet the American Marketing Association estimates that keeping the loyalty and increasing the buying power of an existing customer costs five to eight times less than locating and acquiring a new customer. Gartner says it’s 10 times less.
AeroGrow International, makers of the AeroGarden kitchen garden appliance, announced incredible results for their quarter ending 30 June 2007. AeroGrow’s revenues increased 664% over the prior year (to US $6.3 Million for the quarter) with the addition of database marketing to existing customers via the launch of its product catalog.
Scott Pulsipher, writing in CRM Buyer and E-Commerce Times, believes losing any customer or partner is expensive and unnecessary.
The act of marketing to existing customers masquerades under different terms:
1. Up-selling is the simple art of re-selling an upgraded version of the same product to existing clients.
2. Cross-selling merely means suggesting that existing buyers of product A might also be more than a little interested in complementary product B.
The AeroGrow catalog features 19 new products among 31 total products – evidence that marketing the new along with the old (cross-selling and up-selling) to existing customers produces high Return on Investment.
Even when you’re firing on all marketing cylinders with your existing customers, there are still smart ways to do more.
A new breed of predictive marketing software allows you to profile your existing best customers. Armed with this profile, you can better tailor your marketing collateral to match the interests of your current customers, or you can reach out to new like-type customers that match the profile. Josh Mellberg, owner of Senior Advisors Wealth Management (Tucson, AZ) super-charged his direct mail campaigns and increased his response rate by 40 percent using Copperkey’s BizFusion Prospector. He trimmed nearly $30,000 from his annual marketing budget as he ramped his revenue.
So you can love the ones you’re with, who remain the most likely to buy your products and services, or find new ones that look just like the ones you love. The rewards to great marketing are there for you. Carpe diem!
(Jill McCubbin is a Communications Architect with market2world communications Inc., Canada's tech PR and product launch agency.)