Why you should consider engagement marketing
It seems that engagement marketing is the ‘in thing’ amongst savvy marketers. It’s a strategy that directly engages consumers, thereby encouraging them to actively take part in the brand as it evolves. This, in turn, develops into a lasting relationship between the consumer and the brand, often standing the test of time and competitors’ marketing.
This sounds distinctly like a version of old-fashioned customer service. Remember that?! Engagement marketing relies on a long-term connection between a brand and the consumer that needs to be nurtured and enhanced over time. So if nurturing your customers is the way forward, why do companies spend so much on recruiting new customers?
A recent report from Adobe revealed that online retailers spend 78% of their marketing budget on search and display advertising, while around 41% of their revenue comes from existing customers, who make up just 8% of their website visitors. As a result, European retailers have to recruit seven new customers to equal the repeat purchase value of a single existing customer, while US retailers have to sign up five new customers.
It’s not rocket science: companies which are desperately trying to bring new customers on board would do well instead to spend some time and money on nurturing their current customers towards 100% satisfaction – and therefore, repeat business. According to the Adobe report, these are the people who spend the most, and if they’re happy, they tell their friends and, hey presto, new customers!
Companies are really missing out on ROI by seeming to ‘forget’ about the all-important customer relationship. The Adobe report estimates that if online retailers invested in keeping another 10% of their existing customers happy enough to keep buying, they would double their revenue!
It’s definitely worth allowing more room in your marketing budget for investment in customer service. What’s the point in busting a gut and spending the bulk of your marketing budget on recruiting new customers, if you’re not looking after the ones you already have?
We’re seeing that more companies are realising the need to listen to the feedback of their customers and to react. We agree with Danny Iny, author of ‘Engagement from Scratch’, when he says, ‘When you are in constant contact with your audience, you know what they want’. Surely this is what engagement marketing is all about?