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Why You Need to Market and Not Just Sell to Your Existing Customers

by Todd Berkowitz  |  February 20, 2014  |  8 Comments

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Back in December, I wrote a blog post and research note (subscription required) about the “MQL Trap”, the problem that afflicts technology marketers who focus primarily on generating Marketing-Qualified Leads (MQLs), often at the expense of other, more important activities. One of those neglected functions is marketing to existing customers. When tech marketers are hyper-focused on MQLs, they typically abdicate responsibility for growing revenue from existing accounts to the sales team. They only market to them when they want them to attend a user conference or on an ad-hoc basis around product launches.

When study after study shows that it’s easier and cheaper to sell to existing customers than to try to acquire new ones, and loyal, happy customers are key to influencing prospects, provider marketers should be completely engaged in this effort. Account managers or “farmers” do a great job with account maintenance and preventing issues from reaching Planes, Trains and Automobileslike status, but they are neither marketers nor product experts. And that’s a problem because your customers don’t just want access to support or basic account management, but also frequent contact, tailored offers, white papers and other things that should be coming from product marketing and management rather than sales. In our 2013 survey of 503 buyers of B2B technology and services, a significant number of respondents viewed these activities as extremely significant in terms of expanding the relationship (and propensity to buy more from you). See the graphic below:

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But you can’t simply flip a switch and start marketing to your customers without a thoughtful, programmatic approach. Expanding usage, cross-selling and upselling is different than making the initial sale. That is the subject of some new research called “Best Practices in Using Marketing to Increase Share of Wallet With B2B Customers” (subscription required). I provide a framework based on four steps including:

  • Agree on Marketing’s Role and Objectives
  • Collect, Consolidate and Correlate Data to Uncover Hidden Opportunities
  • Map Content and Activities to the Customer’s Buying Journey
  • Enable the Field and Partners for Selling to Existing Customers

Each of these areas (especially the last three) can require significant time and effort upfront. While so much more data is available than ever before, not of all of it is created equal and you’ll need to figure out what really matters. Analyzing the data usually requires tools and you’ll need to find one that works based on resources, skills and IT support. If you don’t have content geared toward existing customers, you’ll need to develop it or modify existing content. And if your sales force (particularly the account managers) and partners aren’t really adept at cross-selling and up-selling, you will need to devote some effort in enabling them to be successful.

The research note also highlights some great examples of how providers such as Tableau, AppDynamics, Revana, Hubspot and VMWare have all been successful by focusing on growing share of wallet from existing customers and adopting the elements of the framework that I described above. What these providers are doing isn’t rocket science and they don’t have armies of super-exclusive data scientists making it happen. They simply saw a problem and/or opportunity and then employed a rigorous approach to solve the problem and capitalize on the opportunity.

If you have access to the document, I would strongly encourage you to take a look, especially if you have multiple products, a critical mass of customers (especially happy ones), multiple use cases for your solutions, and some white space to expand. Given the overwhelming business case for investing in efforts to grow wallet share from existing customers, you should be having a conversation with your CMO and/or executive management team about this topic.

 

Category: content-marketing  customer-experience  customer-marketing  go-to-market  

Tags: cross-selling  customer-marketing  mqls  upselling  

Todd Berkowitz
Research Vice President
3 years at Gartner
18 years IT Industry

Todd Berkowitz is a Research Vice President focusing on B2B technology marketing and sales. He advises product marketing leaders, CMOs and sales enablement leaders on how to improve the effectiveness of their demand generation, sales enablement, account-based marketing and upsell/cross-sell efforts. He also looks at how data, analytics, content and tools can improve marketing-sales alignment and overall effectiveness.. Read Full Bio


Thoughts on Why You Need to Market and Not Just Sell to Your Existing Customers


  1. Todd,

    solid post, enjoyed your thoughts on this along with your tech G2M series for Gartner. You’re spot-on re: new client acquisition being more resource-intensive than building out existing relationships. As you pointed out, the irony is that none of the steps that help a company get there are rocket surgery. Having a couple things in place, though, makes that less complex for some than for others

    – a continuum of products and/or services; if all you sell is widgets, your only upsell opp is to push more widgets. If you also offer, say, Windows 7 migration services for those widgets, you’ve got more options.
    – a well-versed sales/BD force, especially if you provide a large range of services; without a nose for opportunities that may be outside of their official remit, how will you even learn of those opportunities?
    – appropriate reward and recognition systems to encourage upsell vs newsell; if there aren’t financial or other incentives, sales becomes a lot less interested.
    – centralized ‘ownership’ for target upsell accounts; using us as an example, we do $150M+ of business with one of the top three U.S. banks annually, across every service line and engagement model we’ve got and 40+ of their offices. Figuring out what opportunities makes sense, at least in our case, requires some legwork.

    There’s more, but I need caffeine ;). Thanks for a good post.

    ksn

    • Todd Berkowitz says:

      Thanks Karsten! I address what makes a company more likely to succeed in the research note, but you bring up some good points about sales compensation here. I can see a follow-up note from our team looking at these types of things from the sales side. I’ll reach out to you if we do that.

  2. My pleasure. I cut my professional teeth in org dev years ago, love thinking about this kind of stuff. Just booked an inquiry to talk over what you’ve got cooking this year, looking forward to it!

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