Customer acquisition is an essential aspect of any business operation. New customers add to your base and bring in more revenue. However, an ineffective and unfruitful customer acquisition strategy can be costly. According to a study, acquiring customers costs 5x more than retaining your old ones.
If customer acquisition is expensive, then it makes business sense to spend much more of that budget on retention. But then again, if you’re running a business, you need to reel in customers to the fold to drive further growth.
The good news is if you play your cards right, you can turn your most loyal customers into your most valuable assets for your customer acquisition strategy.
Incentivized Direct Referrals
Direct referrals, or supercharged word-of-mouth, by brand loyalists to friends and family can be rewarding for enterprises, brand loyalists, and target customers. This is because direct referral marketing works extremely well, especially when trust is present between the referrer and referee.
Statistics show that direct referral marketing remains the most influential and effective form of marketing. Brand loyalists are the perfect referral agents, especially when brands provide them incentives. Why?
For one, 92% of consumers trust the referral or recommendations of people they know personally. Even acquaintances can also contribute to a brand’s referral marketing campaign. Research says that 9 out of 10 consumers are willing to try new products recommended by their acquaintances against 2 out of 10 who do so by relying on digital ads.
Even without any reward, loyal customers will refer products and services to people in their circles. When you add the element of incentive for both loyalists and prospective customers, they are empowered and motivated to participate. That’s the measure of impact loyal customers have to a company’s direct referral efforts.
Actual Customers as Social Influencers
As far as any customer acquisition strategy goes, social media is undeniably a huge, critical marketing platform for any business. Over 53% of the global population consume social media, spending an average of 2 hours and 25 minutes daily. For brands that want to leverage their loyal customers to attract and acquire new customers, the social media space is a bustling waterhole.
According to research, 92% of consumers trust an influencer more than an advertisement or traditional celebrity endorsement. And we are talking about a paid professional influencer here. But if brands field actual customers to share their success and stories via social media, the impact would be immensely greater.
Modern consumers demand authenticity over corporate, branded messaging and advertising. Nothing comes across as more authentic than actual success and experiences of real customers. Having real customers share their success stories on social media platforms provide brands that element of authenticity sought by consumers.
Also, leveraging customers as social influencers grants them access to non-customers and tight-knit communities unreachable by conventional marketing means. 88% of consumers trust success stories, testimonials, and reviews as much as recommendations from friends or family.
Two-thirds of consumers say they’re more likely to buy a product or subscribe to a service after watching a story/testimonial video showing how a business, product, or service helped someone like them. This is why we are seeing more brands tell customer success stories, along with customer testimonials, across social media. It works.
Data-Driven Profiling, Segmentation, and Targeting
While influencers can be impactful customer acquisition partners, your loyal customers’ data can achieve far greater effect when used to create models and customer profiles.
Creating customer profiles is critical to the success of their marketing campaigns, say 99% of professional marketers. However, marketing to new and prospective customers can be challenging as brands may not have the necessary data to build precise profiles.
Government data regulations, along with consumers’ skeptical view of brands looking to get their data, make it increasingly difficult for brands to obtain data. What brands can do is use the data acquired from current loyal customers to model what a good customer looks like and target non-customers meeting that profile.
With insights from data of their most loyal customers, brands are able to create extremely accurate profiles, allowing them to hyper-personalize their customer acquisition strategy to drive better results. That said, brands must ensure that they have the necessary permissions to collect, analyze, and use the data of their customers via a permissioned and transparent value exchange.
Brands can leverage the data of their loyal customers to acquire new customers. But they also have to ensure that all data privacy-related requirements and expectations have been met.
This is crucial. 79% of consumers are at least somewhat concerned about their data privacy, and 64% said their concern or awareness about data privacy has increased over the past 12 months. That’s why brands must be transparent about how they collect and use data, crucially empowering customers to exercise choice over whether to share their data and which data to share.
Loyal Customers: Partners for Growth
Customer acquisition is a challenging endeavor, regardless of the organization’s size, industry, and success. Adding more customers is a prerequisite of growth, which is why any acquisition effort must be thoroughly planned, carefully budgeted, and well executed.
Leveraging the loyalty of consumers as part of their customer acquisition strategy presents brands with opportunities to drive acquisition and growth without spending more. Thus, it is imperative for companies to identify their most devoted loyalists and make them essential partners for growth.
What do you think? Let us know your thoughts.