In a study by Influitive, conducted by Demand Metric, the resources and investment organizations are making in Customer Marketing… “pursuing revenue from existing
customers…” is considered to be significantly important to roughly three-quarters of the respondents.
The view most organizations have of revenue generation is pretty
straightforward, says the report: generate leads, qualify them, pass them on to the sales team who then closes deals with new customers. But, what sometimes gets lost in the shuffle is the revenue
generated from current customers.
Customer Marketing is often a backwater in many companies, but any firm’s customer base is an asset, though often an underutilized one. It involves
cross selling, upselling and building better relationships with established customers. Far from being a backwater, it is a proven contributor to revenue growth, says the report.
The analysis
of this study’s data provides these key findings:
- 92% of organizations in this study have some sort of Customer Marketing efforts or function, and 53% of them report getting
moderate to significant revenue as a result
- Large companies (72%) are much more likely to report moderate to significant Customer Marketing revenue than medium (45%) or small companies
(52%)
- 85% of study participants are using some sort of metrics to track their Customer Marketing efforts. The metrics most associated with moderate to significant revenue impact from
Customer Marketing are “Renewal rate or churn” and “Customer influenced revenue via referrals or references.”
The results organizations are getting are evenly
varied across of spectrum of no revenue or measurements to significant revenue contribution.
- Results or revenue not tracked (27%)
- Revenue contribution is
minor (20%)
- Revenue contribution is moderate (28%)
- Revenue contribution in significant (25%)
The responses were put into two
groups to analyze the results of this study:
- No/low revenue impact: includes all participants that selected “Customer Marketing results or revenue isn’t tracked” and
“Revenue contribution is minor”
- Moderate/high revenue impact: includes all participants that selected “Revenue contribution is moderate” and “Revenue
contribution is significant”
Relationship Between Company
Size And “Moderate/High Revenue Impact” Revenue Results From Customer Marketing |
Company size | % Reporting Significant Impact |
Small companies (those producing $25 million or
less in annual revenue) | 52% |
Medium companies (producing from $26
million to $500 million annually) | 45% |
Large companies (over $500
million annually) | 72% |
Source:
Influitive/DemandMetric, September 2014 |
Study analysis detected threenoteworthy differences in the Customer Marketing activities pursued by survey
participants in the no/low revenue status group compared to the moderate/high revenue status group.
Customer And/Or User Group Events Are The Top Customer Marketing Activity |
Customer Marketing Activity | % of Respondents Utilizing |
Customer and/or user group events | 61% |
Customer testimonial program | 54% |
Online
customer community | 54% |
Cross-sell and/or upsell campaigns | 50% |
Customer advocacy program | 48% |
Customer
referral program | 46% |
Customer satisfaction program | 41% |
Renewal campaigns | 31% |
Other
activities | 6% |
Source: Influitive/DemandMetric, September 2014 |
Measuring anything that marketing does is important, and Customer Marketing activities and results are no exception, says the report. First, the perception of
the ideal metrics; then, metrics are actually in use and compare the differences, if any.
Ranked Metrics For Tracking Customer Marketing Effectiveness |
Rank | Measurement
Metric |
1 | Upsell and/or cross-sell revenue |
2 | Renewal rate or churn |
3 | Customer
influenced revenue via referrals or references |
4 | Satisfaction |
5 | Product usage or adoption |
6 | Number of
customer-related campaigns (e.g. email, newsletters) |
7 | Net Promoter Score (NPS) |
Source: Influitive/DemandMetric, September 2014 |
Customer Marketing Metrics Study Participants Say They Are Currently Using |
Customer Marketing Metrics in Use | % of Respondents |
Renewal
rate or churn | 44% |
Customer influenced revenue via referrals/references | 42% |
Upsell and/or cross-sell revenue | 39% |
Number of customer-related campaigns | 37% |
Satisfaction | 37% |
Net Promoter Score | 29% |
Product Usage
or adoption | 27% |
None | 15% |
Other metrics | 11% |
Source: Influitive/DemandMetric, September
2014 |
The report points out that the metric identified as most important, upsell or cross-sell revenue, ranks third in actual usage. The
most important metric should probably also be the most frequently used, opines the report. But, the reason it’s not is probably due to the difficulty of accurately tracking upsell or cross-sell
revenue.
A final observation about metrics, says the report, comes from analyzing the metrics in use through the “Status” variable, and concludes that there are
two important metrics associated with moderate to significant revenue impact:
- Renewal rate or churn: The higher revenue impact group uses this metric in 59% of cases, compared to just
27% for the lower revenue impact group
- Customer influenced revenue via referrals or references: The higher revenue impact group uses this metric in 53% of cases, compared to just 30% for the
lower revenue impact group
When either of these metrics were in use by an organization, it was more likely for their Customer Marketing activities to have a higher
revenue impact, concludes the report. And, the greatest insight from this study, says the report, also provides the most compelling justification for Customer Marketing: the strong relationship
between Customer Marketing and customer satisfaction.
To access the complete PDF report,
please visit Influitive here.