Welcome to the age of modern marketing, also known as the age of the customer. With a new era marked by technology and multi-channel interactions, marketers are struggling to adapt to the changes.
At Interact 2014, Laura Ramos, vice president and principal analyst at Forrester Research, shared insights from an upcoming survey about the areas that marketers need the most improvement — focusing on how to convert suspects into prospects.
“It’s not about scaling the old model. It’s not about doing the same things you’ve always been doing in new channels,” Ramos said in her presentation. “It’s about how figuring out how to treat every opportunity as a unique opportunity and taking customers through an optimized process that recognizes their individual needs hundreds and thousands of times across their lifecycle. You cannot do that without doing things differently and using technology to get there.”
The four stages of customer conversion
Modern marketing is all about putting the customer first and delivering personalized messages, tying back to a brand’s desire to boost customer loyalty and retention. After all, it’s six to seven times more costly to acquire a new customer than it is to maintain business with an existing customer, according to research by Net Promoter and Bain & Company.
Marketers need to understand how to convert suspects to advocates through four important conversion points, according to Ramos. The majority of marketers spend 80 percent of their money and resources on the first two stages — turning suspects into prospects and prospects into customers — yet only 20 percent on the last two stages — turning customers into happy customers and happy customers into advocates, according to Forrester Research.
“When you look at the customer lifecycle to really understand how data, analytics and information can make us better understand our customers, we have to start with the customers that we know and move backwards through the lifecycle,” said Ramos.
Here are findings about each conversion stage:
Suspects to prospects: Big data about best customers is essential for finding other “best customer” prospects. 42 percent of marketers analyze best customer behavior to understand how they buy and to find others like them, but only 19 percent use that data to optimize the buyer experience at each stage.
Prospects to customers: When sales and marketing don’t collaborate, customers are lost. Only 27 percent have integrated sales and marketing to make lead handoff seamless, but everyone should be doing this, explained Ramos.
Customer to happy customers: This is a marketers’ biggest untapped opportunity. Three in 10 marketers are engaging customers to convert repeat purchases and to grow wallet share, and 27 percent are engaging customers after purchase to ensure onboarding and adoption is efficient, according to Forrester Research. “After these people become customers, your communication, instead of being marketing messages, spam, noise and things they put barriers up to resist, are now welcome communications,” explained Ramos.
Happy customers to advocates: When customers love the company and product, they’re likely to spread the word. 47 percent of marketers are prescribing to serve buyers so they become advocates and share their experiences by interacting with them on Twitter, LinkedIn and other social channels, but only 20 percent are engaging with their customers for the purpose of converting them into brand advocates.
4 Steps to improve conversion
For companies that don’t know where to start on the conversion path, here are four steps that Ramos recommends:
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