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July 8, 2021

Why Marketers Should Be Measured on Retention and Expansion

As more businesses evolve to make customer experience a top priority, the strategies and KPIs on which marketers and sales leaders are measured are evolving accordingly. 

Instead of measuring success primarily on leads generated for the business, marketers are increasingly focused on driving revenue. Similarly, instead of viewing marketing attribution through the lens of just net-new business acquisition, marketers and sales leaders are increasingly partnering with services to prioritize sourcing good-fit opportunities and nurturing them into raving fans and brand advocates.

While this evolution represents a shift away from traditional “funnel” models, it also makes better business sense while creating opportunities for marketers and sales leaders to add value across the entire customer lifecycle. 

Marketing and Customer Experience

The shift to a more revenue and customer-centric marketing approach isn’t just a short-term play for cross-sell and upsell opportunities — it also helps brands to differentiate from their competitors and to position themselves for long-term success.

“Marketers are uniquely positioned to have influence over the entire customer experience,” says Al Moore, Director of Service for New Breed. “They have historically been aligned toward customer acquisition and sales and they are increasingly able to influence customers beyond the sales stage.”

Marketing determines how prospective customers discover your company and are brought into the funnel initially. Marketing creates the narrative that prospective customers engage with as they evaluate the ways your company can solve their needs. Marketing helps prospects and customers alike understand the value they gain from your solution. 

“Customer marketing has always been a piece of the puzzle. It’s just an increasingly important piece now,” Al says. “It’s also important to glue everything else together to look at the overall customer journey so we’re actually creating campaigns and looking at our marketing strategy with the entire customer journey in mind.”

The benefits of a holistic marketing strategy

Marketing campaigns should be inclusive of prospects, customers and internal stakeholders in order to create a comprehensive and cohesive experience. Doing so helps your brand and enables you to hone your marketing strategy around the most successful audiences.

Download our Ultimate Guide to Inbound Marketing to learn how to build a  successful, optimized strategy.

“There’s a flywheel effect that happens. If you are targeting and engaging with prospects who become good-fit customers, and you continue to market and measure toward those customers as they become engaged users of your product or upgrade and expand, you can identify who those audiences are and you become much more certain of your product-market fit and who your best-fit customers are,” Al says. “Then you can tailor your customer acquisition strategy accordingly.”

Marketing toward customer experience also contributes greatly to your overall brand.

“If you’re actually engaging with your customers, you’re also inherently engaging with the people interfacing with those customers, your internal stakeholders, service teams, CSM teams, anyone who’s touching the customer should be aware of how marketing is reaching that customer and you’re reinforcing your brand narrative and deepening brand affinity among both of those audiences,” Al says.

Goals Guide Your Marketing Efforts

The goals marketing teams are held accountable for will influence where they place their focus and what work actually gets done. So, if you want them to spread their efforts across the entire customer lifecycle in order to create the best experience possible, their goals need to be distributed accordingly. 

“If you’re looking to increase revenue by 10% then you can’t take the revenue you already have for granted,” Al says. “There has to be retention built into your goals, and you need to set marketing targets around what that retention should look like.”

How do you want marketing to contribute to improving retention and increasing expansion? Effective targeting that only brings in good-fit leads to begin with? Customer enablement campaigns that help clients maximize the value they gain from your solution? Product marketing strategies that promote upsell and cross-sell opportunities?

“Frame your plan and your KPIs around what your business is aiming to accomplish, both from a retention perspective, a product launch perspective and a net-new business perspective,” Al says. “Look at that holistically and identify targets accordingly.”

The Takeaway

“If you’re serious about customer retention, if you’re serious about category leadership, then you need a holistic marketing strategy that covers both acquisition and customer marketing, and it needs to be measured accordingly,” Al says.

Spreading your focus between acquisition and retention/expansion is a more cost-effective way to run your business. It’s five times more expensive to acquire a new customer than it is to retain an existing one, and the likelihood of selling to an existing customer is 60–70% while it’s only 5–20% for prospective customers.

“If you under-invest in marketing to your existing customers and creating a customer lifecycle within your strategy, then you’re accepting churn,” Al says. “And, you’re going to lose money because all of your investment is going into the cost of acquisition... That opportunity cost is very lopsided unless you’re embracing more of a holistic customer marketing strategy.”

Additionally, the brand benefits of a customer-experience-focused marketing strategy can help differentiate your company from your competitors.

“In SaaS, where there’s more competition by the day, solutions are increasingly commoditized. To avoid being a commodity, you need to create a sense of connection, affinity and a deeper loyalty to your brand and among your users,” Al says. “The best way to do that is through creating an outstanding customer experience and staying close to your customers to keep them informed of what your product can do for them.”

Goals that incentivize your marketing team to address the entirety of the customer lifecycle will result in the most scalable growth for your company.

Download the Ultimate Guide to Inbound Marketing

Quinn Kanner

Quinn is a writer and copyeditor whose work ranges from journalism to travel writing to inbound marketing content. She’s super passionate about grammar and punctuation and loves learning new things that she can share with readers. Her favorite punctuation mark is the em dash.

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