Guest Post by Jim Dougherty. Jim is an expert on social media and technology who blogs at Leaders West.
Have you ever heard the adage that it “costs less to keep a customer than to acquire a new customer?” It may be truer than you realize.
According to a recent Neilsen study, two-thirds of your customers want to be repeat buyers. The study explains that consumers prefer the familiarity of past experiences over the excitement of trying new things, and suggests that poor economic conditions deter people from switching products. Yet despite the advantages that businesses have with their customers, competitors intervene to steal them all of the time.
There is a proven tool to help businesses maintain their competitive advantage with past customers. That tool is email.
It may sound antiquated to recommend email campaigns in the era of Facebook, Twitter, Pinterest and all things social, but there is good evidence to suggest that email drives repeat sales.
Last year, Forrester published a paper, “The Purchase Path of Online Buyers 2012” which showed that email surpassed any other channel for repeat sales. Not only did email referrals generate more sales than social media, but it wasn’t even close. The Direct Marketing Association (DMA) affirmed Forrester’s study with their own data, stating that email has a decided advantage over other channels when it comes to generating sales.
If 60% of your customers want another one of your amazing widgets, would you rather have your customer’s email address or have them Like you on Facebook? The answer is that you want both. We know that the majority of your customers want to buy from you again. We know that email is likely the most effective means to re-engage those customers.
But as the DMA points out, email communication is much more sophisticated than simply emailing a weekly advertisement or one-off promotion. Cross-channel marketing enables a level of sophistication that a siloed, one-size-fits-all approach cannot.
Social media offers businesses a robust set of data. Everything from basic demographics to customer feedback and inquiries (social care) to how your competition positions themselves relative to you (social monitoring). Using social media to inform an email campaign allows you to easily segment customers and to personalize your “relationship” with them. If you’ve ever been upsold on Amazon because “users who bought X bought this,” you can appreciate the value of this type of customer segmentation.
In his book Influence: The Psychology of Persuasion, Robert Cialdini discusses that writing down an affirmation gives it much more power, even suggesting that it anchors those words to the writer’s self-image. Universal McCann’s “Wave 6″ social media study affirms a variation of the same principle: that social media discussion increases brand loyalty. Social media appears to be an important influence multiplier for email marketing campaigns.
Cross-channel marketing requires a sophistication that isn’t possible using individual tools. Customer relationship management (CRM) software like the Vocus Marketing Suite is increasingly necessary to achieve that level of sophistication.
Myriad data streams need to be consolidated and attributed back to each customer. If she interacted with a Facebook post, if she raised concerns on Twitter, or if she clicked specific offers in an email, CRM software allows businesses to take action at the user level while maintaining their economy of scale.
CRM is also a powerful tool for new customer acquisition. It can help to identify prospects, quantify share of social voice, help to optimise brand content for search and to amplify the reach of branded content. This is important because this is technology that enables your competitors to undermine the relationship between you and your customers.
The Wave 6 study concludes with this statement: “The consumer is often the most powerful advocate and ally of a brand.”
The challenge for businesses is to deploy tools that enable customer advocacy to be fully realized.
Image: methodshop.com (Creative Commons)