You learned about it in school, your sales department continues to speak of its importance, but it’s dead. The sales funnel as we’ve known it with its one-way linear structure is finished. Customers today are an ongoing target. They are constantly being pushed and pulled in different directions with other brands competing for their time. You can see this across social media and online advertising. And while a customer may have purchased from you once, future purchases are far from guaranteed.
Today we call the sales cycle a Customer Decision Journey. The Customer Decision Journey is a non-linear process beginning with “awareness” and “evaluation.” If you are successful, a customer converts, and if you are really successful, that customer will become an advocate, continuing to purchase from you and encouraging others to do so as well.
This has always somewhat been the process consumers would go through even before the days of the Internet. But now with nearly infinite amounts of information online that consumers can use to research and make decisions, not to mention the constant barrage of content and advertisements, customer loyalty, much less advocacy, cannot be taken for granted.
Customer Retention is Key
We’ve all heard it said that customer retention is more cost effective than new customer acquisition. So why don’t businesses focus more effort on that part of the sales cycle? Why do they assume that customers will stick around?
It’s important to develop content that will continue to inform and inspire your existing customers, reminding them of why they chose you in the first place, and why you are better than the competition. For example, if you are a software company that is subscription based, you want to regularly make your existing customers aware of updates you are making to constantly improve your product. By informing existing customers about this ongoing development, you are reinforcing their decision to stay with you.
The Loyalty Loop
Customers who continue to convert and advocate for your product are in what is called the “loyalty loop.” This is the gold standard for customer retention. You not only have a satisfied costumer who continues to come back for more, but they are spreading the word. The efforts of these advocates bring more customers into the sales cycle and the profitability continues to grow.
Word-of-mouth advertising will always be the most effective form of advertising. If you can ask a friend what his or her recommendation is, you would much prefer to take his or her word for it than trust an advertisement you saw online. Especially if that friend has tried several other options and has concrete information on why a certain decision is best.
Developing online advocates such as this is crucial. If this friend chooses your company as the best option, and promotes your company online to his or her followers, this is the Internet version of word-of-mouth advertising.
By identifying those advocates who are influential in guiding other people’s purchasing behavior, and providing those advocates with the information they need to promote your company, you are marketing your business in the most effective way possible.