What Is Customer Marketing And Why Is It Absolutely Important In 2021?

Two professional men smiling and shaking hands while sitting

Did you know that it is much more expensive to get a new customer than retaining one?

With that knowledge, would you want more business development specialists on your team?

Or more customer service reps?

Well, hold that answer.

Because it depends.

If you recently started a business or your revenue model is based on getting more users onboard.

Your focus would be on acquiring new customers. But for the majority, the gold lies with the existing customers.

This is where customer marketing comes into the picture.

Today, I’ll talk about what customer marketing is and how you can use it to turn your existing customers into your fans.

Let’s go wild!

What Is Customer Marketing?

The definition of Customer marketing is straight-forward. It is any marketing activity that is focused on your existing customer base to improve retention, growth, loyalty, advocacy, and community engagement among them.

Groove HQ defines Customer Marketing as a strategy that focuses on elevating and leveraging current customers’ experiences to improve retention and growth.

Customer Marketing can have just one goal or a combination of all the above. But the primary focus here is catering to your customers’ needs in the best ways.

This ensures that they remain loyal to you and spend more on your product.

An important part of customer marketing is customer loyalty marketing.

Story Of Ruth’s Excellent Customer Service | John Boccuzzi, Jr. | TEDxBryantU

What Is Customer Loyalty Marketing?

Exchanging white shopify card with black wallet by two hands

Customer loyalty marketing is a subdivision of customer marketing.

It is specifically focused on providing amazing customer experience so they remain loyal to you, provide you repeat business, and act as champions of your brand.

The most common strategy used in loyalty marketing is rewards or loyalty programs. The more they spend, the more they’re rewarded.

This directly affects the share of wallet in your sector.

What Is Share Of Wallet?

Share Of Wallet Customer Marketing

Share of wallet is a business concept to determine how well you have penetrated your customer’s wallet.

It is the amount of money that the average customer spends on your product instead of your competitors’ product in the same category.

To take an example, let’s say you’re in the gardening business in Mumbai.

Cumulatively people in your area spend $10000 on gardening services.

This is the total wallet available in your area for gardening services. Now, if you have captured $2000 out of the available $10000, that’s your share of wallet.

In order to get a good share of wallet, you have to create solid customer relationships and to do that Customer Marketing is essential.

Why Is Customer Marketing Important?

Smiling woman wearing red top holding credit card as she looks at her laptop with shopping bags kept on the table

Do you remember those day when prospective buyers had only few alternatives and had to go by what a company is saying about themselves?

Only a few of them reached out to existing clients to know about their experience.

This is because the process was time-consuming. And most of the time buyers went with their gut feeling.

Today things are different though. It’s become so much easier to know how existing customers are saying about a company. That’s why customer marketing is so important.

More buyers are looking at what the current customers are saying before making a buying decision.

Because getting feedback from existing customers has become quick and easy.

You can look at a company’s social account and see if there are any red flags.

You have Google reviews – the first thing that pops on the right of the screen when you research a company.

You even have businesses providing a platform for reviews. Yelp, Zomato, Trip Advisor, and so on.

For e-commerce businesses, feedback in the form of ratings is very popular.

You can even filter products by their review.

“Amazon – show me pillows that are 4 stars and above.”

People don’t even buy a spoon without looking at customer reviews.

“We see our customers as invited guests to a party, and we are the hosts. It’s our job every day to make every important aspect of the customer experience a little bit better.”
Jeff Bezos

Prospects have an overwhelming number of choices today.

Earlier, each town had one shoemaker. So it limited the choice. Today, there are thousands of shoemakers across the world that are competing for your attention.

In such a crowded marketplace, users rely on word-of-mouth. Because it creates a feeling of trust for the product or company.

Existing clients prove your brand values.

Look, you can claim a thousand things and then some more.

But if your existing customers are not advocating for you, why would a new prospect believe you?

An honest above average review about your company from a user is much for reliable for a prospective buyer than a super awesome product pitch from you.

So how do you get your customers to give 5 star rating to you?

By providing superior customer services and customer marketing.

A customer takes a unique journey with your company. Your job is to hand hold them through these stages.

Customer Marketing Funnel

You often hear about lead nurturing. But have you ever heard of customer nurturing?

Yes, even your existing clients need nurturing. 

Think of it this way, when you buy ice cream, would you just want to eat the topping and throw away the cone?

No, right?

Similarly, you should enable your customers to extract the highest value from your product. And you give yourself the chance to make more revenue.

A typical customer goes through 5 stages in their journey with a company. This customer journey can be thought of as the customer marketing funnel. And it starts right when a customer purchases your product.

Why Eat Just The Topping When You can Eat The Whole Ice Cream?

Stage 1: Acceptance

Man wearing suit sitting and curiously looking in to his laptop

Buying your product is not enough. It’s your responsibility to make sure that your buyers are using the product.

You might wonder, why would someone buy something and not use it.

There are plenty of reasons. They may be reluctant to switch from their existing service.

Your onboarding process can be terrible. Or they lack the motivation to take the next step. A prime example of this is gym memberships.

Stage 2: Retention

Woman is grey top and black pant lying on grey sofa working comfortably on a laptop

The next step is ensuring you do not lose your existing customers. Look, there will always be some churn, but your job is to make sure it is minimized as much as possible.

Let’s look at an example.

Imagine you have 100 customers who pay you $10 each for your service. 17 of those leave you in the next year. But 25 new customers join you.

So this means you now have 100-17+25 = 108 customers. That means a growth of 8% percent, right? And you should be happy.

Not yet.

Let’s assume it takes $1 to maintain your existing customers, while it takes $5 to get a new one.

So that means without acquiring a new customer you would have spent $1*100 = $100. And you would have made $10*100 = $1000.

But now you’re spending $1*83 + $5*25 = $208. So now you’re making $10*108 = $1080.

So you’re spending $108 more for $80 revenue!

Stage 3: Growth

Growth Customer Marketing Funnel

According to Annex Cloud (https://www.annexcloud.com/blog/21-surprising-customer-retention-statistics-2018/), a customer spends 67% more in their third year as compared to their first year.

That’s why it’s essential to focus on improving the customer lifetime value by cross-selling, product upgrades, etc.

Let’s go back to the previous example. For fun, let’s imagine all the 17 customers who left were in their third year. And the rest are in their first.

This is how the calculation should look right now.

With the same set of 100 customers, you would have spent $1*100 = $100. And you would have made $830 (10*83) + $283.9 (16.7*17) = $1113.9.

A handsome profit of $1013.9

Now you’re spending $1*83 + $5*25 = $208. But making $10*108 = $1080.

How much is your profit? $872.

So you’re making less with more customers!

Stage 4: Loyalty

Woman in white top and and blue jeans ans socks sitting on a bed working on a laptop as she looks at her dog sleeping

The next step in the funnel is encouraging loyalty among your customer base.

We can relate this to the previous point. Having loyal customers with a high customer lifetime value is essential for business growth.

This is because this will ensure you’re spending less on acquiring new customers and keeping the ones you already have.

Think about it as much as 30% of internet users have ad blockers, so it’s getting more difficult to gain new customers.

Also, loyal customers are more likely to recommend your product to others. This is where brand advocacy comes into the picture. That is also the next stage.

Stage: 5 Advocacy

One happy women is recommending something to another woman on her laptop because she's happy due to good customer marketing

The last step in the funnel is advocacy. You want to turn your loyal customers into fans. People who act as champions for your brand.

Brand advocates can get you serious business through word of mouth.

Think of it this way, if a customer has been using your product for a while and they love it.

Wouldn’t they want more people to join his team? Wouldn’t they want to recommend your product to their colleagues and be known as the go-to person?

It’s psychological. If you believe in something, you want your family and friends to believe in it.

There are several ways to ensure that your customers are transitioned through the funnel in the smoothest manner.

In this article, Copper talks about the 8 most effective customer marketing strategies.

How To Build Long-Term Relationships For Customer Marketing?

Most businesses run after acquiring new customers. And as mentioned before, it’s costlier.

Thinking of customers as just a number is a huge mistake. They want you to solve their problem. They are not interested in being your 100th customer.

Great Vs Meh Customer Service Real Experience | Six Figure Mastermind


The focus should be on forming a relationship with your clients. To engage with them in a way that builds trust.

These are some customer marketing steps to build strong customer relationships:

Get Feedback

Two professional women talking to each other while sitting in a conference room

The fundamental foundation behind any successful relationship is the ability to hear out the other person. And this is true for both personal and professional relationships.

You do not want to rant on about how good your product is. Instead, listen to what your customers are saying. And try to solve their problems with your product.

There are several ways to listen to your customers. Social media provides the perfect platform to track what your customers are saying at scale.

Another way is directly asking for customer feedback. This also gives an excellent opportunity to ask active questions, instead of listening passively.

Also, don’t just stop at listening, collect data as you go along. This can be helpful in understanding your customer better – their problems and pain points. And then, come up with newer and better solutions to serve them better.

Provide Value

Man in dark blue t shirt holding a baked bread half wrapped in white cloth

Obsess over providing value to your customer. And I’m not saying this lightly.

Your end goal should be to help your customers reach their end goal or solve their problems.

Analyze all the difficulties that your customers are facing and create a long term content plan to educate them.

Here’s the thing about reciprocity. If you help people, most people help you back.

The point I’m making here is if you can delight your customers by serving them, they will keep coming back and give you business.

Keep In Touch

Man wearing white shirting typing on his phone

I can not stress how important it is to stay in touch with your clients. We often onboard and forget. Or we solve a problem and forget.

Imagine, your customer had a problem with your product, and you solved it – that’s great. Awesome work!

But it should not be a one time thing. Check on them after a few days or weeks to see if they faced the problem again.

See, most people don’t go about complaining again and again. They move on to the next alternative. And you do not want that.

Plus, if you stay on top of mind, guess who they’re going to remember the next time they or their friends need the services you provide.

Remember, every message you send, every call you make, every social media response you give will ensure you build a solid relationship with your customers.

Over To You

Now you know how important your existing customer base is and how you can make the most of it via customer marketing.

Your next step should be to set up metrics for your customer marketing funnel and segregate them from acceptance to advocacy.

Then you can use specific campaigns to target customers in each of these stages. So they can smoothly transition into the next one.

Next, focus on building a relationship with these customers. Why don’t you send out a feedback form to your customers who have been with you for a year?

Trust me, you will get some valuable insights.

And if you’re wondering how Customer Marketing may look like in the near future, check out this interesting post by CMS Wire.

So, are you excited to start your customer marketing journey yet?

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