Is Acquisition Tunnel Vision Cutting Your Customer Lifetime Value Short?
If you ask B-to-B marketers to describe their primary focus, 90% of them will say it is net new acquisition. Marketers spend the majority of their time, money and efforts marketing to and engaging prospects. If this is the charter of marketing, this is fine, but is it your charter?
Many marketers run their department more like a business, meaning they need to make the best financial decisions to create the most revenue for the company. Inherent in this responsibility is the mandate to analyze the entire prospect/customer life cycle to determine where to apply marketing resources to realize the best return. The best place might be in engaging current customers for expansion opportunities.
This article will examine the similarities, the differences and the synergies between traditional lead management (net new acquisition) and emerging customer management (account expansion) practices.
Building a Lead Management Practice
Lead management is the practice of synergizing people, process and technology to produce a marketing qualified lead (MQL) that converts at the highest possible rate into an opportunity and a closed deal. Lead management is also a practice specific to acquiring net new business, one of the most challenging of all marketing activities. From a people perspective, effective lead management is characterized by a tight working relationship between marketing and sales — from envisioning what will resonate with prospects to effective lead processing, both sales and marketing play a pivotal role in optimizing the experience for the prospect and optimizing outcomes for the company. Service-level agreements (SLAs) outline the key responsibilities for both sales and marketing and how they work together to transform a prospect into a customer.
Lead management is best defined as both a practice and a process. Begin by mapping out the lead flow process to determine both the “as is” and “to be” states. What does it look like today and what should it look like? Often marketers are surprised by the complexities in the lead management process because it involves different stakeholders, various technologies and widely different customer expectations. The lead management process map is the foundation for operationalizing an effective lead management program.
Your marketing automation platform and your CRM are your lead management execution engine. Ensuring an optimized integration and use of these systems leads to a more effective lead management program.
The Big Picture
Now, if what I just described as lead management sounds like your world, you are probably missing the big picture and you need to reassess your charter. The TPG One model, shown below, represents one holistic view of the customer.
As you review this simplistic model, what strikes you? How about the whole new world on the right side of the model that represents customer expansion? This side depicts how marketing to current customers yields additional expansion opportunities. How much time do you spend on the right side of the model? If not much, you may be missing huge revenue impact opportunities.
If a major goal of yours is to impact revenue, create a similar map and detail the best revenue opportunities. You may want to focus on customer acquisition, customer expansion or a little of both. Absolute clarity is needed for the optimal application of resources to produce their stated goals.
Building a Customer Management Practice
Customer management refers to engaging customers for additional expansion opportunities. To determine if customer management is key to achieving your revenue goals, look at the data. How often do current customers buy something else from you? What do they buy next? When do they buy it? How much do they spend? The answers to these questions will help you build a pro forma map for your budding customer management practice. If it does indeed look like an opportunity, just like in your lead management practice, determine how to strategically apply people, process and technology for success.
More people are involved in a customer management practice than in a lead management practice. In addition to sales and marketing, any function interacting with the customer as they onboard, adopt and realize value will be involved. This may include a customer success team, an engineering team, a consulting team and a customer service team. Many functions touch the customer; it is important that those interactions and messages are orchestrated to create a cohesive and compelling experience for your customer.
As in lead management, representing the process in a flow chart is critical. The flow chart provides the steps and players on the customer interaction journey and prescribes the people and technology required to optimize interactions that lead to business expansion.
Today’s marketer is constantly challenged with showing a revenue result. If the charter is to act more like a business with an eye to revenue and profit, then you may be restricting your success by using only a lead management practice. We all know it is easier to market to and engage a current or past customer. It’s also more profitable and immediate.