How to build loyalty by turning traditional marketing on its head
For startups looking to launch a marketing campaign over the
holidays, or starting in 2014, here’s a fun little nugget on
marketing, from Ben Chesnut, the co-founder and CEO of email
service MailChimp.
His blog post, Why I Hate
Funnels, isn't revolutionary, but it makes an excellent point,
that companies should forget about traditional ways to convert
readers into buyers, and instead think about empowering their fans
for free.
Traditional marketing, he points out, feels exploitative:
Yet by turning the funnel upside down, companies can build
better long term relationships, he argues.
Why? Empowering customers helps companies retain customers.
Although Chesnut doesn’t use the word “loyalty,” he points out that
retention is crucial for long term viability. Several studies
confirm that fact; according to
Gartner, 80% of your future profits are likely to come
from 20% of your existing customers, while a study by Bain &
Company demonstrated that increasing customer retention rates by 5%
can increase profits by 25% to 95%. It's also been found that
customer acquisition can cost six to seven times more than
retention.
MailChimp, which has been helping users to "send better emails"
since 2001, has seen the direct benefit of inverting their
marketing funnel and nurturing existing customers; ever since the
company turned on freemium services in 2009 and implemented an
education-focused
customer support system, then deployed
giant playful billboards that show Freddie winking and
t-shirts that show him
giving a high-five, its number of new users joining daily has
leapt up from under 100 to 6,000. Today, the company has grown to
serve 3.5 million users who send 4 billion emails a month.
What's so effective about Freddie's winks and high fives, Chesnut
points out, is not that they necessarily encourage someone to start
using MailChimp, but that they make existing customers happier.
Amused, tweeting customers become the brand's own ambassadors,
without MailChimp having to push its product. Fans' testimonials
offer proof that a little creativity can go a long way.
For more on how to revolutionize your relationship with your
customers- especially on a low budget- read Chesnut’s blog
post and watch Seth Godin’s 2007 talk on developing a
successful marketing campaign. Again, this isn't new, but it's
worth revisiting.
What both writers make clear is that a critical component of a
whimsical campaign is also offering an excellent product, great
customer service, and speaking to a community. Setting the right
frame, building trust, and giving customers a narrative to believe
in are what get people to convert to loyal fans, Godin reminds
viewers.