Can you grow your business without marketing to new clients?

Most businesses focus on attracting and converting new clients. This make sense if you have a new business or don't have many customers. However, I am always amazed how little marketing is targeted at existing customers.

Using a simple example, if a business had 2,000 customers who spend on average £100 pa, then the annual turnover would be £200,000. If the business wanted to achieve a 20% increase in turnover:-

• it could attract 400 new customers (assuming no loss of existing customers) who also spend £100 pa. There would be a marketing cost required to achieve these 500 sales.
  
• Alternatively, the business could develop a marketing programme for existing customers that increases their average annual spend from £100 to £120 pa.

There is a higher chance of selling to an existing customer than a new customer

Depending on the individual circumstances of the business, typically the probability of selling something to a prospect is 1-20%. In comparison, the probability of selling something to an existing customer is much higher at 20-70%.

Both marketing strategies would require a marketing investment. Typically, the cost to communicate with an existing customer is often much lower (especially with email marketing) than communicating with a prospect.

So if you combine the probability of success with the lower cost of communication (e.g. using smart email marketing strategies) then you can understand why I am amazed so many companies focus on attracting new customers at the expense of growing the customer lifetime value of existing customers.

In the real world, even the best run businesses will lose some customers each year, so there is clearly a minimum need to 'top these up' with new customers.

The dangers of an excessive focus on new customers

However, if companies fail to get the balance right between attracting new customers and growing customer lifetime value, then it is likely that companies will see high customer turnover, high marketing costs and low customer loyalty.

Having a smart marketing programme to grow Customer Lifetime Value should help reduce customer turnover, reduce marketing costs and grow customer loyalty with the overall effect of improving Marketing ROI.

More on Marketing ROI 

Remember...web marketing is about solving customers' problems profitably.

Peter Hawtin is an internet marketing specialist with Brand New Way, a UK web marketing agency which helps companies to attract and retain valuable customers online.

Does your web marketing get the credit it deserves?

When times are tough, there is clearly a greater need to ensure that all marketing activities deliver the best Marketing Return On Investment. (Marketing ROI) which is simply about getting the most for your money or making every £ count.

This is easy to say, hard to do and challenging to measure. What was the uplift in sales (or value) achieved by that directory ad, direct marketing campaign or Google Pay Per Click campaign?

Web marketing is more accountable

One of the advantages of web marketing is that it can be much more accountable than traditional media. With my e-commerce clients I am able to allocate sales by source and even by keyword. e.g. Keyword X delivered 20% of sales with an average cost per click of 50p and an average revenue per click of £1.50. 

This analysis of key web metrics help guides my clients' future web marketing investment strategies.

Do web metrics always tell the full story?

However, despite the excellent web metric data available does it always tell the whole story? One of my new retail clients achieved over £60,000 sales through the online shopping basket in the first month that our new web strategy and e-commerce store went live. We were delighted, as previously their online sales were zero!

However, their total sales had increased by over £110,000 in the month so with the website accounting for £60,000, what had generated the extra £50,000 sales? The new web marketing strategy was the only thing that had changed. 

Analysis identified that the additional £50,000 of sales had come from telephone sales and 'bricks and mortar' stores. Further investigation identified that these extra telephone and store sales had been made by people who had first visited the website but wanted to either talk to someone on the phone or try the productin the store before making a purchase with a value of £400 - £1,000.

So just allocating the sales by channel would have given a false view of performance with the web marketing not getting the credit it deserves. By digging a little deeper and adding smart tracking techniques provided additional insight and a more robust view of Marketing ROI.

Key learning for companies big or small

• Use web metrics to analyse your key performance indicators on a regular basis 
• Tools like Google Analytics are great but with hundreds of data points (thousands when evaluated by different segments) it can be hard to see the wood for the trees. Having a piano does not necessarily make you a concert pianist. Consider what it would be worth to your business to get a 5% or 20% or 50% improvement in web performance? If you can't see the wood for the trees, it's worth choosing a web analytics expert 
• If you have more than 1 marketing channel and/or more than 1 sale channel, incorporate techniques to help identify the source of the sale. e.g. if you have telephone and web sales channels use a different telephone number on your website to isolate web generated calls / sales
• Include a 'obscure' link on every web page and get your telephone sales people to ask 'web callers' to click the link (to a telephone sales thank you page) which will aid web metrics tracking

Remember...web marketing is about solving customers' problems profitably.

Peter Hawtin is an internet marketing specialist with Brand New Way, a UK web marketing agency which helps companies to attract and retain valuable customers online.

European Online Advertising Spend Continues To Grow

Despite the credit crunch, 81% of advertisers have claimed that they have allocated more budget to online in 2008 & will continue to do so in 2009 & 2010, according to new research from the European Interactive Advertising Association. 

Much of this 'extra' money is being switched from press, TV & direct marketing budgets. In particular, 77% of respondents found that online advertising had a positive impact on their brand and 68% said it improved brand awareness. 

For more insight on why this is happening, take a look at my blog Why is UK Internet Marketing Spend Continuing To Grow Despite All Other Marketing Budgets Being Cut?

More than ever, businesses are focussing on Marketing ROI and want to get the best results for every £ spent.

Remember...web marketing is about solving customers' problems profitably.

Peter Hawtin is an internet marketing specialist with Brand New Way, a UK web marketing agency which helps companies to attract and retain valuable customers online.

James Villa email marketing grabs my attention

With so many emails arriving each day, email marketers are finding it increasingly challenging to achieve standout. 

Emails that I have opted in to receive (such as James Villa Holidays) have a much higher chance of being glanced at, but not always opened or read.

Their latest email jumped out of my preview pane and grabbed my attention, demanding to be read. Given the poor UK summer this year, the beautiful blue sky & sea view compared favourably to the grey sky I can currently see from my office window.

The headline also does a good job of communicating the overall message. 'Your perfect villa', implies both quality and personalisation. The use of 'secure' & 'now' provide urgency and a call to action. Further down, the email provides key benefits, an early booking offer and key links to prompt action.

If they used a similar email marketing system to the one I use for my clients, they would be able to track individuals that click specific links and follow up with appropriate actions to improves sales conversion and maximise marketing ROI.

Remember...web marketing is about solving customers' problems profitably.

Peter Hawtin is an internet marketing specialist with Brand New Way, a UK web marketing agency which helps companies to attract and retain valuable customers online.

Google, serendipity and marketing that money can't buy

I received a call today from a journalist from BBC Radio Wiltshire asking if I was available to participate in a programme about the European coffee culture. He had found me using Google. In Meet Peter Hawtin on my web marketing website, I mentioned that many years ago (before I became a marketer), I was trained as a coffee taster and had worked in coffee research.

I declined the offer as too many years had passed since I was actively involved in coffee and I didn't believe that it would serve the best interests of the audience for me to pontificate based on my experience from over 20 years ago. However, we then talked about marketing and in particular my specialist area of web marketing which hopefully might lead to opportunities to speak with passion in the future.

Key learning:-

• although 'coffee taster' is not a keyword I am promoting on my web marketing website as part of my web marketing strategy, Google picked it up and gave me a high ranking which led to interest from the BBC. Although it is important to focus most of your effort in enhancing keywords critical to your business, it is helpful to include some other information about you which may be serendipitous. In addition to coffee tasting, I mention (on my website) that I learned to ride a motorbike aged 4 and started racing aged 10. Clients and prospects often notice this and ask me about it and it gives them another dimension of who I am.

• getting exposure from a world class organisation like the BBC would be brilliant and it is something that money couldn't buy but it's important to understand that they are not there to promote your brand. They are there to inform and entertain their audience and therefore your contribution needs to help them achieve this if you want to be asked back a 2nd time. 'Winging it' would be a high risk strategy and could do more harm than good. 

• ideally, speak with passion about a subject you are expert in. Approach it from the audiences perspective not yours. What would they find helpful, informative and entertaining? 

By the way, if anyone out there is an expert on European coffee culture, please send me an email & I will put you in touch with BBC Radio Wiltshire.

Remember...web marketing is about solving customers' problems profitably.

Peter Hawtin is an internet marketing specialist with Brand New Way, a UK web marketing agency which helps companies to attract and retain valuable customers online.