Existing customers will always be more open to marketing and more willing to buy than potential ones. So, why are marketers still focusing more on customer acquisition than retention? They should use audience segmentation research to maximize their budget and target known customers in the most effective ways possible.

Audience Segmentation Research Yields Top ROI for Your Clients

Why Retaining Customers is So Important

According to research from Optimove, finding new customers can cost up to five times more than retaining an existing one. Additionally, selling to an existing customer has a success rate of between 60% and 70%. Selling to a new customer has a success rate of only 5% to 20%. The buying power of existing customers is so great that it takes the acquisition of three new customers to make up for the loss of one existing customer. And to top it all off, “80% of the value creation achieved by the world’s most successful growth companies comes from their core business – principally, unlocking new revenues from existing customers."

Yet, in spite of all that, only 13% of marketers budget more to retain existing customers than acquiring new ones. If your client’s goal is to increase sales, they should be looking to their brand’s loyal customers, not to people who still have to be persuaded of the value of your client’s offerings.

Best ROI Tactics

If your client wants to start putting their budget where the ROI is, Optimove recommends investing in these tactics:

• Retention/​Churn-​Prevention/​Reactivation, etc.
• Increasing customer lifetime value (CLV)
• Creating and delivering personalized customer experiences
• Prioritizing data-​led campaigns over creative-​led initiatives (including audience segmentation research)
• Improving post-​purchase loyalty/​repurchase

Overcoming a Top Challenge

The biggest challenge when practicing retention marketing is identifying valuable customers to invest in, says Optimove. If you want to convince your client to switch their priorities from acquisition to retention marketing, you’re going to have to be prepared to solve this problem for them.

One of the ways you can go about solving this problem is with audience segmentation research. Through audience segmentation, you’ll divide your client’s list of existing customers and narrow it down based on characteristics, needs, behavior, etc. For the purposes of retention marketing, your main focus should be on prior purchases. With that information, you can determine which customers tend to make the highest number of, or biggest, purchases. That category is obviously an important segment to target in your client’s retention marketing efforts.

Data-​Driven Messages

While you’re performing audience segmentation research, you should also be prioritizing first-​party data (or data you and/​or your client have collected directly from their customers). According to a HubSpot article, first-​party data includes:

• Demographic information
• Behaviors or actions taken across your client’s website and apps
• Survey data
• Customer feedback
• Customer purchase history
• Online chat transcripts

With that data, you will know exactly what kind of ads to send to your client’s top customers/​audiences. It will also help with the personalization process that consumers have come to expect when being contacted by a business, especially one they’re loyal, or at least existing, customers of.

Collecting Information

For help collecting demographic, purchase intent and marketing best practices information on your client’s target audience(s), check out their profile(s) on AudienceSCAN on AdMall by SalesFuel. There, you can learn what types of ads this audience responds to the most, how they feel about different types of ads, their lifestyle profile (including their demographic, personal interest and hobby-​related information), and what types of products and services they plan to purchase within the next year.

With all this information at your disposal, you’ll have no problem crafting the perfect retention ads your client has needed to boost sales.

Photo by Mathias Reding