It's an established fact that it costs five times more to attract new customers than to sell to existing ones. Yet, nearly half of all companies spend most of their marketing efforts on logo acquisition instead of upselling to their existing customer base. Current customers present an incredible opportunity to capture a competitive edge. With the right strategy, a SaaS company can extend customer lifetime value and reduce customer churn while increasing its profits. This article explores the benefits of Customer Marketing and its relationship to Customer Success and why both are so important to SaaS companies.
What is Customer Marketing?
Customer Marketing is any marketing activity or campaign designed to target existing customers. Essentially, Customer Marketing focuses on upselling to current buyers; however, a savvy company also incorporates Customer Success initiatives within its Customer Marketing activity. No matter how loyal a customer may be, no one likes to be relentlessly sold to. With the right intentions, a SaaS company's Customer Marketing activities can help reduce churn, raise customer retention, extend brand loyalty, and inspire customer advocacy.
In contrast to traditional marketing, Customer Marketing leverages the experiences of existing customers to drive growth. It relies on the strength of established customer relationships to increase profits with significantly less effort than acquiring new logos.
In addition to driving revenue, Customer Marketing targets already engaged customers through continuing communication. Loyal, engaged customers are most likely to give valuable feedback that allows a SaaS company to make changes to improve customer experiences. Another incredible benefit of Customer Marketing is the opportunity to capture significantly higher conversion rates; on average, existing customers are 50% more likely to purchase or try a new product and spend 31% more than new logos. Cross-selling is also easier with existing customers because they are naturally inclined to spend more money with a company they already trust.
Beyond the capacity to capture more revenue from existing customers, perhaps the most powerful benefit of Customer Marketing is customer advocacy. Buyers who have a good customer experience with a product or brand are primed to tell others about their positive outcome. Customer Marketing capitalizes on this by finding creative ways to drive word-of-mouth advocacy.
Comparing Customer Success With Customer Marketing
Customer Success and Customer Marketing both play pivotal roles within any SaaS company. Both departments are critical to reducing customer churn and extending customer lifetime value. Customer Success concentrates on ensuring buyers achieve maximum value from their customer journey—that customers can successfully reach their business goals with a company's products and services. Customer Marketing aims to sell more products to existing customers, as well as to incentivize and reward customer advocacy.
A SaaS company often achieves the best results when these two operations work in tandem toward the common goal of customer retention. In some cases, Customer Success may even helm a company's Customer Marketing strategy. The data collected by Customer Success teams is often paramount to shaping a company's Customer Marketing strategy. Close cooperation between these two business ops ensures that Customer Marketing remains focused on what's best for the customer while also allowing the company to capitalize on customers' success.
Why Is Customer Marketing Vital For SaaS companies?
Considering that more than 50% of a company's revenue will come from existing customers and that satisfied customers are over 65% more likely to upgrade or purchase a new service from a company than a recently acquired customer, any smart SaaS company should make Customer Marketing a high priority.
The majority of SaaS companies depend on a subscription or usage-based business model. With a subscription model, customer retention is the key to sustained revenue. With a usage-based model, income increases the more customers decide to engage with a company's products or services.
With both models, Customer Success along with Customer Marketing is important to remaining profitable. While Customer Success works to keep current customers happy and engaged, Customer Marketing focuses on extending new and existing products to those same customers and turning them into brand advocates.
Customer Marketing Required For SaaS Success
For a SaaS company to continue to operate, the success of its current customers is crucial to driving growth and reducing churn over time. Customer Marketing relies on this success, leveraging it not only to fuel revenue but to collect valuable, actionable feedback from engaged customers, increase conversion rates, and, possibly most important of all, create brand advocates.
While Customer Success focuses on ensuring that current customers get the most value out of a company's products or services, Customer Marketing aims to upsell new products and services to those same customers. Ultimately, the goals of Customer Success and Customer Marketing teams are aligned, and SaaS companies stand to benefit in a significant way when these two departments work in tandem.
Vitally has created a powerful, user-friendly Customer Success platform designed to help CS teams drive customer loyalty, manage Customer marketing, and increase revenue. Our CS platform is the secret weapon of leading savvy B2B SaaS companies. See how we can help you scale your Customer Success and Customer Marketing efforts by requesting a demo today!