What is a customer really worth? Advocacy, innovation and deeper engagement.

What is a customer really worth?

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More often than not, what we think of as the value of a customer is measured in dollars: what they have paid in cash. In the world of B2B, that might be the size of the initial deal (especially where there’s a large upfront cost like enterprise software deals). Some organizations with an eye on Customer Lifetime Value (LTV) will take into account the complete history of the customer and include upselling revenue. But is this a complete and accurate view of what a customer is actually worth to you? The answer goes beyond simply how much money a customer has handed over.

Brand Advocacy

The customer voice is the most authentic voice in any market; telling real-life stories about your products and services based on real-world experiences. No marketing spin. It’s the most trusted source of information about you and your products or services. Customer recommendations drive sales, so these opinions have value: Word-of-mouth (WoM) drives revenue. However, quantifying the impact of word-of-mouth recommendations is tough, particularly offline recommendations. But online, everything is more trackable (with the right tools), so you can gain visibility of which customers are talking about you (and whether this is positive or negative). You may be surprised. Your strongest advocates might not be those you consider to be your star customers (the big buyers). So, when you’re interacting with customers it is useful to be aware of which ones are advocates and which ones are detractors: your strategy for handling them will be different in each case (with detractors, there is a business problem to be addressed).

Innovation and beyond

Companies that limit themselves to the “customers as buyers” view and never look beyond this are leaving a lot of value on the shelf; customers can be so much more – advocates, innovators, investors, critics, supporters, advisors, creators, curators, defenders, speakers, reviewers, sharers, followers and hosts. Even this is not an exhaustive list of ways companies can extend the value they get from strong customer relationships.

One of the most important value-adds is the “customer-as-innovator”. Who knows your products and services better than your customers? Who knows their own needs better? Nobody. That makes customers the best people to drive your cycles of innovation. They’ll tell you exactly what they want (and will pay for) – if you listen. This insight provides value, but again, it’s difficult to quantify in terms of Customer Lifetime Value. However, having visibility of a customer’s participation in your innovation processes will give your salespeople, account managers and support staff a clearer picture of who they’re dealing with – and how to handle them.

Consider this scenario…

You have two customers that need urgent attention, but you’ve recently lost some account managers and you need to carefully manage your customer triage. Customer A has spent $100,000. Customer B has spent $30,000. So which is the most valuable customer? On the face of it, Customer A looks like the better customer when we consider the direct income. But what if we consider the value of each customer beyond direct income? If Customer A has brought in $40,000 in referred business, and Customer B has brought in $250,000, the picture changes completely. Which customer do you want to prioritize now? It’s $140,000 versus $280,000. The customer that you thought was 3x more valuable is actually only half as valuable. When you factor in other areas of engagement between your company and your customer (such as membership of a beta group), then you add even more dimensions to consider. What you need is visibility of all of these different customer relationship types.

The value of customers goes beyond direct revenue

Why CRM integration with Advocate Marketing is important

For most organizations, there simply aren’t enough account managers and support staff. It would be nice if you could afford to treat all customers like VIPs, but there simply aren’t the resources. Sometimes you have to make difficult decisions around which customers get your time and attention. That’s why it’s important to have visibility of the value of each customer, not just as a paying customer.

When we look at a picture of customer value that includes the value of advocacy (and beyond), it is clear that it’s important to make this value visible. But how do we do so? Most of the people making triage decisions will be on the sales side of the organization, so this information needs to be available to them to support the right decisions. How do we get this advocate value data in front of them? Put it in the CRM tool, where the salespeople live. That means integrating your Advocate Marketing software into your CRM solution.

CustomerAdvocacy.com integrates with Salesforce.com and all other major CRM solutions to provide this link between salespeople and the different flavours of after-sales customer engagement. To find out more, contact us or get a free trial today.


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