Consumer data is among the most valuable resources of the 21st century. And businesses of all sizes and in all industries use it to take their marketing efforts to almost Orwellian levels.
However, while the randomized faceless information used by algorithms certainly has its place, historic and real-time data from your business’s own active users can help create a more targeted approach to new customer acquisition.
By understanding your core customer base, you can better align your products and your practices with the needs of those who are most likely to buy in. Consequently, you can use this data to both keep your existing customers happy, and better focus your marketing and sales efforts for future growth.
Below, are three key ways to use your customer data to drive your business’s acquisition strategy.
Fine Tune Your Ideal Customer Profile
For every product, there exists a certain type of customer that’s not only likely to find value from that product, but who will also be highly receptive to related upsells, upgrades, and other techniques that increase your business’s revenue.
It’s not just that finding and targeting the right customers is good for your business. It’s equally true that finding and targeting the wrong customers can be harmful.
On average, marketing to new customers costs approximately one third of their potential lifetime value. In other words, if a customer is destined to spend $1,000 with your business, it’s a statistical probability that you’ll have spent around $333 attracting them to you. This is all well and good in the case of a successful customer lifecycle. But when you start bringing in customers that are a poor fit, your margins can be damaged as a result.
Does your company provide products or services on a subscription basis? For these companies, it becomes significantly more important to attract customers that are likely to stick around for the long haul. Afterall, the shorter a customer’s lifecycle, the smaller the profit-to-marketing ratio. So when customers only maintain a subscription for a few months (or less), you may actually lose money on the deal.
Juxtapose this with the fact that ideal customers tend to spend 140% more than average and it becomes apparent where the bulk of your attention should lie.
While there are several ways to flesh out your ideal customer profile, none are likely to be quite so accurate and effective as reviewing data on the best-fit customers you already have.
- Which customers have been with you the longest?
- Which customers are getting the most value from your product?
- Which customers are driving the most recurring revenue for your business?
In asking these questions and reviewing these customers and their purchase trends, you’ll likely find common threads that may be the basis for targeted future marketing and sales efforts.
Evolve Your Product and Processes in Line with Your Strongest Customers’ Demands
The old adage that it costs more to find new customers than it does to maintain old ones can be very true. Consequently, there’s a significant financial benefit to aligning your products and processes with the needs and wants of your best customers.
As users, your customers have an understanding of your products that may be significantly different than your own. By virtue of this, they may be able to identify areas for potential improvement that won’t just keep them happy, but may also help to attract more like-minded future customers.
The formula is pretty simple.
Features and processes that are valued by a significant portion of your best customers are likely to be appreciated by potential leads who’ll also benefit from your offerings.
In keeping with this line of thinking, preferences and usage data from your most valuable customers can also help you identify opportunities for product-led growth.
Dropbox is a prominent example of a SaaS company that has used this growth model to great success. Customers first experience Dropbox as they look for a free or affordable way to share files via the cloud. As users share files within their networks, they organically refer and build the company’s user base. The company has evolved its product over time in-line with the needs and feedback of its users. And its users with more significant needs upgrade to paid plans because they’re already familiar and comfortable with the product.
While product-led companies like this tend to give a lot away for free, they can afford to do so because their products essentially market themselves. And the built-in referral of a product is no small advantage considering that referred customers are, statistically speaking, more loyal and profitable than average.
Direct-to-consumer beauty brand Glossier is another prime example of a business growing its revenue and its customer base by paying attention to what its customers want. In fact, the business integrates customer success right in with its marketing as well as its product development.
Team members from Glossier have real conversations with customers to gain feedback and address questions and complaints. Then, that customer intelligence is used to create new products and improve existing ones all based on what they know their customers want.
By continually evolving your product and processes in line with the needs and wants of your active customer base, you’ll ensure they feel represented and rewarded—which can promote expansion revenue—while also improving your offerings in ways that will attract new leads with parallel requirements.
Adjusting Product Packages and Pricing Structures
Reviewing customer data is also a natural opportunity to get a better understanding of where the bulk of your revenue is coming from. Which products, packages, or plans are your moneymakers? Even more specifically, which pricing levels tend to attract the most buyers?
By understanding where the bulk of your sales are coming from, you’re able to focus more attention on the dimensions of your business that are the most profitable. This insight enables businesses to target their marketing and sales efforts to the options that are most likely to attract new customers.
The ability to adjust your pricing structures in line with customer data also keeps you competitive with other companies that are providing similar services.
While cost is by no means the only factor that customers look for—quality, time-saving capacity, and reputation being other considerations that may weigh considerably on the discerning buyer’s mind—pricing your merchandise within a range that your ideal customers deems appropriate is an easy and low-cost way to stay competitive and drive more interest.
Improve the pre-sale experience
If you’re already taking the time to derive feedback from your best customers on your products, services, and processes, why not also inquire about their pre-sales experience?
- Do customers find it simple and seamless to purchase from you, or were there some barriers or frustrations along the way?
- Did they arrive at their point of purchase feeling positive, or were they more perturbed about their experience with your brand?
- And what would help to enhance their purchase journey next time?
And of course, it’s vital to dig into the customers that never were—the ones who abandoned their purchase before even contributing to your bottom line.
What happened that made your potential customers leave before making a purchase from your company, and at what point in the sales journey did it occur?
All of this will give you valuable data to enhance your pre-sales process and improve your acquisition strategy.
Data Collection and Implementation
There’s a range of different ways to collect data from your existing customers. One of the most straightforward methods is simply to ask them how they feel about what you offer, and what types of improvements they’d like to see.
In addition to supplying your operation with very specific feedback, this approach also has the added benefit of helping your customer feel seen and heard. And of course, surveying customers to enhance your acquisition strategy isn’t a one-time deal, but rather an ongoing affair that should be considered a vital part of your ongoing customer success strategy.
There are also more integrated and automated ways to accumulate numbers-driven customer data. For example, customer tracking, monitoring, and reporting can all be accomplished using agile billing platforms and automated subscription billing software for businesses operating with a recurring revenue model. In addition to their many other business benefits, these solutions provide valuable, granular insight into your customers’ purchase patterns and billing trends that can impact not only your retention and acquisition strategies, but also your long-term business growth plan.
The business world is changing at a faster pace than ever before, and one of the best ways to stay on top and ahead of the competition is to listen to the customers that already drive your revenue. In doing so, you’re positioning your business for sustainable growth with customers who’re likely to stick around for the long term.
Daniella is the Content Marketing Lead at Fusebill and a former journalist with a specialized background in the topics of business and finance. Fusebill is a cloud-based automated subscription billing platform that gives companies the freedom to grow by reducing revenue leakage, speeding up collections, simplifying revenue recognition, and offering the flexibility to capitalize on new pricing and product opportunities and the agility to maintain a competitive edge.