Consumers are keeping pace with developing technology and are becoming more sophisticated in their expectations of customer service and how they purchase goods. But companies haven’t necessarily kept pace.
Industry research indicates that an average of 85% of marketing budget is spent on acquiring customers rather than keeping them. An unbalanced strategy, if you think about it. When you compare cost of acquisition spend to cost of attention spend, it is clear that there is more value in keeping and up-selling your loyal customers who already spend money with you. Repeat customers spend, on average, 67% more and extending the duration of your customer relationship can raise profits by 25 to 100%.
How can your company expand relationships with existing customers? One way to reduce customer churn is to tune into the customers’ buying preferences and behaviors. If you see a customer has paid late three times, they could be flagged as a potential churn risk. With this kind of data on hand, a marketer can reach out and take action before the customer leaves.
Leveraging Consumer Purchasing Behavior Data
The role of billing within organizations is no longer just invoicing and accounts receivable, it's impacting every aspect of the business, including the marketing department. Marketers can use billing data to tap into a gold mine of customer buying preferences and behaviors, allowing you to identify and respond to emerging customer trends and trigger product and service innovation
A billing system that is based on the individual activity of customers provides them with a process that feels tailored to their needs, and allows marketers to be much more informed about the likelihood of any customer to be loyal or flee. A better understanding of customers and their buying behaviors allows companies to tailor offers based on individual preferences.
But it’s not just about customized pricing and process efficiency. Customers are 50% more likely to remain loyal if they purchase an additional service or product during a customer service call, and information from the billing process can be used to encourage that behavior. For example, if you have knowledge that a customer has frequently purchased a certain product set in the past, your customer service representatives would recognize the opportunity to market complementary products to them
Marketers need to be aware of anything that can potentially impact customers’ perception of the business. If you discount billing as something that's purely the finance department’s responsibility, you are missing out on real-time insight into how customers are actually consuming their goods and services. Ultimately, you are missing an important opportunity to retain—and grow—your customers that are already adding to the bottom line.
Chris Couch is COO of Transverse.