In this post, we will review why customer marketing is important, the foundations of a good customer marketing strategy, how to turn customers into advocates, how to manage negative feedback, and how to implement a customer marketing program that will grow the top-line.
This is a topic that’s near and dear to my heart. Health Launchpad is the sixth business I have started and, honestly, the most successful in winning net new clients. We have won engagements with 33 new logos in 4 years. It’s only now, in year 5, that growth from existing customers is accounting for the lion share of our annual revenue.
In most of the businesses I have started or run, winning new customers was a real grind, and most of the revenue growth was driven by expansion from existing customers. With one business I ran, we 10x’d the revenue with one client. It accounted for half the company’s revenue and most of its profit.
So, how do you develop an effective customer growth strategy?
A recent episode of the Healthtech Marketing Show was dedicated exclusively to Customer marketing. I was lucky to have the highly experienced health tech marketing leader, Mark Erwich, on the show to share his experience and perspectives.
Listen
Why Customer Growth Will Always Be Critical
We are all taught that it’s 5-10X harder to acquire new customers than grow existing ones. There is some debate about this , but the fact is that keeping and growing your existing customers is the foundation of an effective growth strategy.
Small improvements can have a huge impact.
Research done by Frederick Reichheld of Bain & Company (the inventor of the net promoter score) shows increasing customer retention rates by 5% increases profits by 25% to 95%.
This premise is even more important in our industry, where sales cycles last 13+ months, and acquiring new customers feels even harder than in any other industry.
This is especially important as so many healthcare technology businesses have shifted from an enterprise license model where revenue is front-loaded to SaaS or subscription-based, where the biggest profits come in the later years of a customer relationship.
In my software business, there were a couple of years we only added a few new logos but still had high double-digit growth. We achieve this by adding new users to existing customers and selling them on new features. This was the single most important factor in achieving profitability.
Lastly, customer marketing goes beyond revenue. It can have an impact in other strategic areas of your business. In our podcast together, Mark Erwich reinforced this:
“Customer marketing is so much more than just cross selling and upselling your solutions. It is getting a better understanding of your customers and then ensuring that you have strategically embedded information in all kinds of other departments as well.”
Watch My Conversation with Mark Erwich
Start By Understanding Your Customers
The foundation of customer-led growth is having detailed and accurate knowledge about your customers. Committed customers want to give you more business.
Knowing who is committed and why is not always obvious, especially if your customers are large and complex.
Most companies with high revenues and profit growth gain most of their upside from existing customers. They are masters at understanding what their customers need, how to meet or exceed their needs, and have a disciplined strategy in developing growth plans.
As an aside, the origin of Account-based Marketing (ABM) is in growing existing relationships, not acquiring new ones.
There are many ways to gain better insights. The foundation should be an Account Insights program. NetPromoter Score (NPS) is the best-known one. Personally, I have misgivings about its value in complex account relationships.
In this post, I reviewed a ten-step approach to creating an account insights program in detail. This is the foundation of a customer-led growth program based on knowing which customers are committed and those who want to give you more business versus those who are at risk.
There are many other ways to gather data about how you are viewed by your customers:
- Analysts like KLAS can help understand how you are positioned with your customers. Their research also benchmarks you versus your competitors.
- Consider including social listening to monitor how customers speak about you on social channels.
- Comparison sites like G2, Capterra, and Elion Health provide customer reviews.
- Third-party intent data can tell you if your existing customers are in the market. On the positive side, this may signal interest in other services you provide. On the other hand, if there is a strong signal related to what you already provided them, this may be an early warning sign that they want to make a switch.
Creating and Boosting Customer Advocates
Customer advocates are your fans. They are a critical part of your customer marketing strategy. They go out of their way to promote your brand and refer new customers to you. They are not just satisfied; they are committed to your success.
In our Total Customer Growth model, we highlight the importance of creating advocates, helping them promote you, and, conversely, how to manage detractors.
In my book, Total Customer Growth, part 3 is dedicated to existing customer growth, including a chapter on creating advocates. You can read more about this in this post.
Your customer advocates are an important part of your marketing. The “basic hygiene” of customer advocacy marketing is to get their permission to include their logos in your marketing, create testimonial videos, and write case studies that make them heroes.
The next level in Customer Marketing Strategy is to create a Customer Champion program that fully leverages their enthusiasm.
Champion Customer Program
Here are the parts of a Champion Customer program
- Start by identifying your most committed customers and design a “Champion Customer” program around them.
- Celebrate your Champion Customers’ wins by reposting their news. Tag them on social media.
- You can help them celebrate you by giving them advanced notice of good news.
- Include your most enthusiastic supporters in press stories and releases, create testimonial videos, and include them in webinars and conference panels.
- Host an annual customer event to celebrate customers, tell their stories, and introduce them to prospects.
- Keep educating them through thought leadership content and invite them to contribute to future articles.
- Include customers in your product development process through Customer and User Advisory Boards.
- Acknowledge them by featuring them in launch announcements.
By dedicating resources to these programs, the benefits go way beyond incremental sales. For example, here some questions from Mark Erwich about the impact customer advocates can have on product strategy:
“How are your customers using, your products? What is the value that they get out of it? And where do they see that value? How is their organization changing and how can we continue to provide value and even more value over time?”
Getting a Handle on Negative Feedback and Churn Risk
Even the greatest companies have “haters” and detractors. Managing this starts with listening.
In addition to having a customer feedback system, a social listening program should be investigated to identify customer complaints online.
When a negative post from a customer pops up, marketing and customer success teams should work together on this. When marketing hears that a customer is complaining about online, they must quickly notify customer success. Step 1 is for customer success to acknowledge the customer’s concern and offer to resolve the issue as quickly as possible.
If this is a serious issue and could escalate, organize a team, including senior executives, to meet with the customer and develop a remediation plan. This will demonstrate that you take their concerns seriously. Typically, this will stem further negative posts.
The key is to have a procedure to identify negative news, act as a team, and escalate as necessary.
Measuring Customer Marketing
If you are truly committed to an effective customer marketing strategy and customer-led growth, one of your most important KPIs is net revenue retention (NRR). In my post “Why Net Revenue Retention Could Be Your Most Important KPI,” I explain why.
NRR measures the percentage of revenue retained from existing customers, including upsells and cross-sells, while Gross Revenue Retention (GRR) only considers retained revenue without additional sales.
With my software firm, Uniphy Health, this measure was important in helping us sell the firm.
Although we had a high revenue growth rate, the long sales cycles and the crowded market made it challenging to acquire new logos. What ultimately swung the deal was our impressive NRR of 138%. This proved strong growth within existing accounts and our focus on customer success, investing in more customer success managers than salespeople and providing excellent customer service.
From a sales perspective, measure how much of your business comes from referrals and who are the greatest referrers. For example, we know at Health Launchpad that 50% of our new logo growth comes from referrals.
Another measure to consider includes tracking and measuring customer participation in marketing activities.
Customer Marketing Strategy is a Team Sport
If you have read or watched my posts on ABM, you will have heard me banging on about the importance of Sales and Marketing alignment. When sales and marketing are not aligned, ABM goes wrong.
Equally, the marketing and Customer Success teams need to be hyper-collaborative in customer marketing.
Marketing can help Customer Success, strengthen customer relationships, and grow revenues from existing customers. Conversely, Marketing cannot be successful without Customer Success’s support in providing customer access.
At scale, Customer Marketing involves close collaboration and alignment across multiple parts of the organization. As Mark says in the podcast:
“Make sure that you have alignment across the organization. This is not just the head of sales, your head of customer experience, or support who need to be okay. Product management typically gets involved in these discussions as well.”
Getting Started Creating a Customer Marketing Strategy
Customer Marketing is a vast subject and can be overwhelming. Here are ten ways to get started:
- Conduct an audit of your current customer marketing efforts to identify areas for improvement.
- Set up a social media listening program to monitor customer feedback and sentiment.
- Develop a customer champion program to celebrate and showcase your most successful and engaged customers.
- Create a series of case studies highlighting the impact of your product or service on your customers’ businesses.
- Establish a Customer Advisory Board to gather insights and feedback on your product development roadmap.
- Collaborate with your customer success team to identify at-risk customers and develop targeted retention strategies.
- Implement a customer referral program to incentivize and track customer advocacy.
- Host a virtual or in-person customer event to foster community, share best practices, and showcase customer success stories.
- Develop a content marketing strategy that educates customers and positions your company as a thought leader in your industry.
- Set up a dashboard to track key customer marketing metrics, such as retention rates, customer participation in marketing activities, and the impact of advocacy on new business acquisitions.
Do You Need Help
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Check out more about the ABMLaunchpad. This is a resource center focused exclusively on ABM for healthcare. It includes online learning, articles, podcasts, and much more.
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Learn about ABM Acceleration: This is our proprietary and battle-tested approach to ABM.
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Buy Total Customer Growth: Our book on how to win and grow customers for life with ABM and ABX.
- Download tools and templates: You can download tons of tools and templates to help you with your pilot. This registration page is to get the assets referred to in the book.
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Work with me directly. Let’s book a growth session, and we can explore ways to get started with ABM.