May 12

Should lead generation ignore current customers?

Marketing Strategy

8  comments

”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?

About the author 

Brian Carroll

Brian Carroll is the CEO and founder of markempa, helping companies to convert more customers with empathy-based marketing. He is the author of the bestseller, Lead Generation for the Complex Sale and founded B2B Lead Roundtable LinkedIn Group with 20,301+ members.

  1. Brilliant post. It seems that companies have somehow contracted the same congenital defect that most salespeople have when it comes to communicating with their current customers. All that matters is the logo for the Customer Slide- then onto the next “conquest.” Other glaring examples from the consumer side include the sweet deals that new telephone and satellite users get that are inaccessible for people trapped in 2 year plans…

    In a SaaS world where recurring revenue is king, your comments are all the more pertinent. The customer that is paying monthly is always a “new” one!

    If i could humbly make a suggestions for companies looking to to get their CRM databases in “working order” (trust me, no company’s is), have Jigsaw run their Clean product against your data to weed out old names and append and augment new ones.

  2. Just came across your really excellent blog and read some of the posts. I will be back for more insight. Keep up the good work.

  3. I agree that a great Customer First Plan needs to be in place to make new customers feel welcomed and engaged but not the extent that you begin to pay less attention to existing clients.

    A great brand, an engaging brand, targets both just as effectively!

  4. As a young marketer (I have only been out of school for 3 years) I am amazed how few companies really focus on their current customers. I can’t tell you how many of my professors in business school told me how 20% of your customers account for 80% of your business and how it is easier to keep a current customer than to acquire a new one.

    After I had been at ReachForce for only a few months, I was asked to join a management team planning meeting. Myself and a few other non-management employees were asked what we saw as areas with opportunity for improvement. I raised my hand that we needed to do more for our current customers. Lucky me I now run all of our current customer initiatives. I started small by sending out Thanksgiving cards (beats the rush and avoids offending anyone). I just recently launched an integrated book club program by sending a marketing book to all of our customers and then discussing it on our blog, http://www.theb2blead.com. We have received a lot of positive response so far, but still waiting for the revenue numbers.

  5. The primary reason we don’t spend as much attention as we should on customers is the notion that they’ve already bought. So we turn our marketing and sales attention to the customers who haven’t bought. Very typical for a growth-oriented company. However, as a company matures and new sales opportunities diminish, we turn our attention to existing customers and discover with astonishment we haven’t being paying very much attention to them.

  6. I feel that there needs to be a 50/50 split between your leads and customers. Your customers are the ones that are bringing in the revenue but without that lead nurturing process the revenue achieved will be much lower. A company should have certain people in place within the organization to qualify and nurture leads. In terms of a large company there is no way that an employee will be able to keep track of “all” customers. In order to make this much simplier the customers should be broken down into territories and organized into a CRM.

  7. While doing some research – I found this post (from the site http://www.cmocouncil.org). Thanks for this post! I have been trying to improve my own customer service after reading this book written by the president of a company called mindshare. I have been shocked at how little information I could find about customer retention! Thanks for your extra motivation – I was beginning to think that maybe I shouldn’t focus so much on this! (oh and good call on that database – I didn’t think about that one).

  8. Just stumbled over this post now.

    The answer is definitely no. But iwith two caveats:
    First, it should not be done alone by Marketing. I believe the account managers should actually take the lead for very targeted approaches to avoid disasters looming from uncoordinated approaches.

    Second, Marketers also have to change their mindset towards a account based marketing approach (that is from a customer specific approach which might allow for some generalization to other customers.

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