The economic tide continues to deliver plenty of ebb with very little flow. The impact of decreased spending and tanking consumer confidence is being felt by companies across the board. Often, none feel it more strongly than the marketers within those businesses.
There is no better time than now for marketers to prove their value by demonstrating the revenue-generating potential of their department.
The knee-jerk response to shrinking sales is to focus on growth through customer acquisition. But experience has taught us that concentrating on understanding and keeping the customers you’ve got is the strongest strategy in battling churn.
Understand your customers
Marketers must look at their customers in a new light as they begin to tighten their belts. That means understanding what customers expect and what is important to them in a slowdown. Don’t assume your previous customer insights hold true, as economic challenges can change consumer views dramatically. Focus research investments more on customer behavior and tracking tools and less on branding. Create and disseminate engaging and relevant messages based on a solid understanding of customers’ preferences, needs and behaviors.
Concentrate on current customers
During a slowdown, it is smart to generate more value from current customers than to pursue new ones. In tough economic conditions, customers also feel vulnerable and are more likely to stay with a company than make a switch.
When people are worried about spending, increasing relevant engagement is more likely to generate sales than simply highlighting a brand. Engaging appropriately with customers during a slowdown and helping them through their own difficult situations will build stronger relationships. Capitalize on the trust and goodwill that you’ve created with existing customers and find ways to help them navigate the slowdown. That’s a strategy that will build both business and loyalty.
Analyze and segment
Customer profiling, clustering and value models are essential to identifying which customers spend the most, learning how to lift sales and detecting high-value customers showing signs of diminishing value. New behaviors are sure to emerge during a slowdown. Proactively assess and respond to them.
Marketers should focus on the improvement of the analytic battery of customer profiling, segmentation and modeling — not just analytics and insights, but also the ability to deploy effective targeted and relevant communications. This includes more sophisticated campaign planning, data management, creative execution and campaign management capabilities.
Knowing who to market to is often overlooked when marketers are forced to focus on just wrestling up enough resources to market to anyone, period. However, by focusing on these steps for gaining better customer understanding—along with those we will discuss in future articles—marketers can demonstrate their value as an asset with the potential to help any business ride out even the lowest of economic tides.
Nancy Shaver is an insight strategist for Experian Marketing Services.