Customers are the most important part of your business. It’s a fact. The ultimate goal of any growing business is to attract and nurture a loyal relationship with its customers.
But customer acquisition and customer retention often compete for attention from your marketing budget.
When faced with the reality that acquiring a new customer can cost five times as much as retaining an existing one, you may be tempted to throw all of your resources to attracting new business.
The reality is that it’s important to dedicate as many resources to retain existing customers as it is selling to new ones. Both are essential and require separate strategies.
Increasing customer retention by just 5% can increase profits from 25% to 95%. In addition, the success rate of selling to a customer that you already have is 60-70%, versus 5-20% for new customers. There is great value in keeping the right customers.
Businesses need to craft a game plan that effectively attracts and retains customers with tactics that can be measured and altered as needed to achieve success in both areas. Here, we look at best practices for marketing strategies that identify and manage new customers differently than returning customers.
Attract Customers and Maintain Contact
Attracting a new customer takes time and patience.
Consumers have more options than ever – not only in terms of where and when they shop, but also how. It only makes sense that retailers have to work harder and smarter to gain customer loyalty.
To realize the benefits downstream, retailers will need to move the battle to the top of the sales funnel. Here lies the “awareness” and “interest” phase of the purchase experience.
Strengthening the top of the funnel also means giving attention to the middle and bottom of the funnel so those initial prospects move forward to conversion.
This is why it is so important to optimize all your digital assets – your website, landing pages, content, SEO, and social media campaigns – to work together as an effective marketing funnel. Talk to us about your business marketing strategies.
When someone moves into the middle of your sales funnel, that means you’ve captured their interest. This is where you want to show why your product is the perfect fit or solution to your customer’s needs.
How well you satisfy your customer’s needs will affect the likelihood that they will return. Returning customers will spend more often and will refer their friends and family.
Know Your Customer
Is a customer someone who has purchased an item from your company within the last six months, or at any point in time? What about a repeat purchaser from several years ago?
Say two customers bought from you yesterday. Today one searches for items from your company using a generic search (i.e. sports cars), the other—a branded search (i.e. Ferrari sports cars). Are they both considered your customers? Or should the one using a generic search have to be “re-acquired”?
You would also want to consider transaction data – at what point in time is it unlikely that your customer will return? Will they still return after a year has passed?
Understand Your Customer’s Purchase Path
Searches typically fall into the realm of new customer acquisition, situated towards the top of the funnel and comes at higher cost.
However, this cost is justified when you understand that you can further nurture your customers to purchase using other channels such as email and direct marketing.
A customer’s journey can be complex, so it is advisable to have a multi-channel strategy. For example, a customer may discover a new product on Instagram, view that product again via display ad retargeting, and later research that product on Amazon – only to finally purchase it after receiving a promotional email.
Create Ad Campaigns for Acquisition and Retention
After defining who your customer is, divide your ad campaigns based on new or returning customers. For example, your ad campaign could target these 3 sets of audiences:
- Completely new visitors to your site.
- Those that have visited your site in the past 3 months but have not purchased.
- Lastly, this group has purchased from you within the last 3 months and would be returning customers.
Set Unique Return Goals for Each Group
With your audiences set, it’s time to determine a unique, specific return goal for each.
Generally, you should be willing to invest more (to a less efficient return) to attract new customers. However, since you have already invested in the returning customer, you should set a more efficient return goal in that case.
Segment Further to Align with Your Customer’s Journey
Once you’ve obtained enough data to analyze, you may be able to segment each ad campaign further. You may be able to target each audience by device, or branded vs. non-branded search terms.
Watch for KPIs of Success
Watch your key performance indicators to see if you are hitting your return goals. Are new customers in line with your new customer profile? Are you gaining new customers while maintaining the same level of profit?
Your growth in search will naturally level off if you aren’t consistently refreshing your ad campaigns. It’s smart to develop a habit of making tweaks every 3 months or so, depending on your data results.
If you would like to learn more about how to improve your customer acquisition and retention, contact us today.
Often defined as a complex state of feeling, emotions result in both physical and psychological changes that influence thought and behaviour. They’re associated with temperament, personality, mood, and motivation.
Emotions also constitute the foundation on which decisions are made.
How Emotions Influence What We Buy
Emotions greatly influence and can even determine our buying decisions.
When confronted with a choice, emotions from previous life events create preferences and patterns that lead to our decision. fMRI imaging has shown that when evaluating brands, consumers primarily use emotions rather than information like brand attributes, features, and facts to make their final decision.
Emotion is one of the reasons why most people prefer brand-name products. Big brands with large advertising budgets that market on a large scale can create an emotional connection with the consumer. Therefore, rich, emotional content results in a loyal user.
How Emotion is Used in Marketing
Human emotion is based on four overarching emotions: happy, sad, afraid/upset, and angry/disgusted.
Positivity has been shown to increase sharing and engagement. Brands have also recognized that sad or inspiring ads are hugely successful.
Fear, on the other hand, is an instinct that helps us to react to threats. Advertisers have found that ‘scare-vertising’ is one way to leverage this. Surprise is a more positive form of fear and can be seen in ads such as this one.
Finally, there’s anger. We often think it’s best to avoid anger, but in some cases, it can wake people up and spur action and change. While negative images are less common in advertising than positive ones, viral success occurs when negative images have an element of anticipation and surprise.
So, how are feelings actually used in marketing? The most shared ads of 2018 relied heavily on emotional content such as friendship, inspiration, warmth and happiness. Although this style of advertising wasn’t always the case: in the 1990s and 2000s, advertisers focused on humour and sarcasm.
The Future of Emotional Marketing
Today, many brands are going beyond simply telling emotionally-driven stories, targeting different ads to specific moods for maximum impact.
In 2016, the USA Today Network began categorizing its content by topic and tone and scored it based on the emotions it was thought to evoke. They then started selling advertising based on that knowledge. This concept represents targeting an audience based on psychographic characteristics rather than demographics.
Recently, the New York Times also rolled out a project called Project Feels that lets advertisers target ads to content based on predicted emotional responses. ESPN has also pitched a tool that would target sports fans on its digital platforms based on their changing emotional state during a game.
Tapping into feelings and emotion is a powerful way for marketers to formulate potent advertising. When used properly, feelings help facilitate consumers’ understanding of an advertising message and motivate them to buy.
You don’t have to hop the border to see great marketing in action. In the spirit of #Canada150, let’s show some true patriot love for our most iconic Canadian brands!
44 years ago, a small leather goods store sprouted up in Toronto. Its line of comfortable, durable clothing caught on with Canadians who love the outdoors.
Today, there are over 200 Roots stores all around the world.
From its iconic beaver logo to its rustic store design, Roots capitalizes on our reverence for the Canadian wilderness. When we think Roots, we think nature. And when we think of nature-ready clothing, Roots is the first brand that comes to mind.
With so many distinctive cultures, it can be hard to pin down what it means to be Canadian. Roots succeeds by tapping into something that transcends cultural and generational lines: love for the great outdoors.
Hudson’s Bay Company
Hudson’s Bay Company holds the title of Canada’s oldest company, but the modern Bay bears little resemblance to the bygone fur-trading empire. The company dabbled in everything from fur to transportation to oil exploration before it finally settled on retail in the 20th century.
The retail face of Hudson’s Bay has evolved as well. When it broke ground in Quebec in 1965, the HBC gave its stores a trendy new title: The Bay/La Baie. The company later refreshed its brand and reclaimed the original name.
Throughout its incarnations, Hudson’s Bay has maintained an iconic brand identity. People immediately recognize the name and the four-colour stripe pattern (known as the HBC Point Blanket) as a symbol of quality. Hudson’s Bay has held its place as other large department stores struggle in tough economic times.
When times change, Hudson’s Bay changes with it. The original Canadian company owes its longevity to its ability to adapt without compromising on core values.
Surprised? You’re not alone. Aldo is iconic, but many shoppers don’t realize their favourite shoe store is Canadian.
Aldo was fashioned from the remnants of Le Chateâu’s shoe division. Its key to success was bringing trends to its shelves before its competitors could. Its founder set out to capture the latest in street styles in record time. Now, Aldo has 2,000 stores in more than 55 countries.
Aldo sells itself as a global brand, and its social feeds feature photos of trendsetters from around the world. This has paid off to the tune of millions of followers on Facebook and Instagram. Its success proves Canadian brands don’t have to fly the flag to stand out in the world marketplace.
As the story goes, John Molson was committed to “brewing the best beer in the world for the people of Canada.” We could argue about the merits of his brew all night, but one thing’s for sure: Molson knows the Canadian people.
Molson first launched its “I Am Canadian” campaign in 1995. Canadians aren’t prone to self-promotion, but when Molson made the declaration a retort to Canadian stereotypes, it was a hit.
“I Am Canadian” has been the heart of Molson’s marketing ever since. Molson has since incorporated theme into mountains of merchandise and viral video campaigns.
We love brands that help us define our Canadian identity. Molson has leveraged this to build an incredibly loyal following.
Let’s face it: we can’t talk Canadian brands without mentioning Tim Hortons. Canada’s most trusted brand is so prevalent in our communities and culture that it’s practically a part of Canada itself.
It didn’t get there by accident. Though it has changed corporate hands over the years, Tim Hortons has always maintained a clear and consistent identity. Its advertising appeals to nostalgia and family values, and small communities embrace Tim Hortons for its sponsorship of sports teams and fundraising for local causes.
The Tim Hortons of today is the same one we stopped by for Timbits after hockey practice. It owes its success to the generations of good will it has built with Canadians.