Should lead generation ignore current customers?
”We know more about our prospects (leads) than we know about our current customers” was a shocking statement I heard from a client and it stuck with me. In fact, it’s the impetus for this post.
When you have a complex sale, it can be easy to think of lead generation as only a process for acquiring new customers rather than a process that can also be applied to generating new or more business from current customers.
A while back I was in a meeting with a marketing leader of a Global 100 software firm. He shared a story about their new CEO at the time. The CEO asked 10 members of the executive team to write a list of their top-10 customers. Amazingly just 4 of the 10 executives got 5 of more of the customers correct! Their VP of Sales faired best, with correctly listing 8.
In the same meeting it was pointed out that the top-10 customers accounted for over 50% of their $300 million in revenue. The CEO immediately declared that, “we’re focusing on our customers first!” From that meeting they dubbed their new initiative as, “The Customer First Plan.”
As a result of reaching out and talking to their customers, they saw a net revenue increase of 15% from current customers and their customer referrals increased by over 100%.
Still, I’m amazed at how many marketers seem to only emphasize new account acquisition when they could also be going further with their existing customers.
According to research by the CMO Council, “Marketers Are Flying Blind When It Comes to Leveraging Customer Data.” The study showed, “just 6 percent of marketers say they have excellent knowledge of the customers when it comes to demographic, behavioral, psychographic and transactional data, while over 50 percent report they have fair, little, or no knowledge of the customer.”
Conducted in late 2007 and early 2008, the CMO Council’s “Business Gain From How You Retain” study undertook a wide-ranging evaluation of where and how marketers are "operationalizing" customer intelligence and insight to reduce customer churn, increase lifetime value, improve the customer experience, and increase the effectiveness and targeting of marketing spend.
The CMO Council concluded, “Only 50 percent of global marketers report having a strategy for further penetrating or monetizing key account relationships. In addition, a surprising 45 percent rate the effectiveness of customer relationship management (CRM) systems as deficient or needing more work, with only 15 percent of companies rating themselves extremely good or effective at integrating disparate customer data sources and repositories.”
The solution to solving poor customer management is to leverage a processes that you already have (or should have!). A lead generation program that includes teleprospecting, lead nurturing and lead management.
Adding a customer program to the lead generation mix can be fairly straightforward. The messaging is a bit different, but ultimately we still need to be a relevant resource to people.
Often the first task in a customer program is to update the database. How long has it been since the database was verified? Are your contacts still there and are they in the same role? If you don’t already know the condition of your data, you can pull a random sample of data to test. Make sure you pull enough data to insure the test is statically valid.
Once the database is in working order, then question becomes, “How can we educate our current customers and affirm their decision to be working with us?” Nurture those all important relationships. Just like when reaching out to prospects, positioning you and your organization as trusted advisors is essential to building trust that starts AND maintains AND expands relationships.
From this point forward you should look to your current customers with the same energy and optimism as you do with your prospect and you’ll be amazed with the results.
So, do you have a Customer First Plan?