|Getting New Customers In This Endless Recession
by Gary Kreissman , Friday, August 19, 2011
We all know the script now, don’t we? The latest financial crisis comes, the markets overreact, the politicians throw up their hands, and the consumers hide under the bed and stop spending. Then the marketers try to figure out how to grow while their staffs and budgets are being cut for the second time in three years. Not a recipe for a happy ending — or for holding on to your CMO position.
But maybe this time the marketing characters in this little play can rewrite the story. When consumer spending looks to be plateauing at a low level, smarter customer acquisition becomes a must. Let’s take a look at four ideas resourceful marketers are implementing, assuming we are in the midst of an ongoing downturn that never quite mustered a recovery.
· Use CRM strategies for prospecting: CRM is all about relating to your customers on the terms they prefer, and exceeding expectations.Tremendous expenditures go into segmenting customers and identifying what motivates their loyalty. But in the Endless Recession, loyalty will erode, simply b
ased on consumers’ diminishing resources.
Now, it is solid ROI thinking and good defense to apply the principles behind CRM to segment your prospects too. Why? Because some prospects are worth a lot more than average to your franchise in both the short and long run. And those valuable prospects likely have very different interests and needs than typical prospects.
· Focus your limited resources on your most valuable prospects: It just makes sense to invest where you’ll get the best return. So define what makes a valuable customer for your business (e.g., frequency of purchase, volume of purchase, net worth, attitude). Once you have the definition, put disproportionate spending — and thought — toward finding and nurturing more of those customers. That may mean higher perceived value offers, more personalized service, “inside” access, or greater variety of ongoing contacts (e.g., email, postal, phone).
Since you’re reading Performance Insider, you no doubt know that securing qualified leads can be done by exchanging your offer for prospect information. Tailor your initial incentives to ferret out the valuable consumers who still have the disposal income to step up and show their potential interest in buying your product. Get them into your database first – then build a relationship on common ground to convert them from hand-raisers to enthusiastic customers.
· Let your best customers be fruitful and multiply: Social media operates on the assumption that “like attracts like.” And that’s a strong sentiment in bad economic times. During the worst of the ’08 debacle, I often noticed friends bragging about the great deals (or value added) they got from hotels, airlines and retailers. They generally didn’t have to be asked by marketers to share these stories – they were simply a badge, a symbol of survival. So if you have strong economic or informational offers for your most valuable customers, many will talk about them and others will want them. But imagine if you further sweeten the offers for customers who actively share with peers. This can be much stronger social leadership than being the mayor of some bar.
· Offer relevant incentives: Marketers should not use standard offers in bad times. Consumerism or overt prestige repels strapped consumers. But value works. Discovery often does. And hope is welcomed – think of Coca Cola selling happiness in ’09, or Obama‘s brilliant ’08 campaign. Your offers simply need to address new realities and provide pragmatic solutions
The advantage to recognizing and working within your target customers’ recessionary world is loyalty. That translates to market share now and significant revenue growth when this Endless Recession finally does end.
Getting New Customers In This Endless Recession by Gary Kreissman