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Is Failure To Follow Up Costing You Customers?

Today, many marketers are failing to recognize a significant and growing opportunity by ignoring past customers. According to a study by Adobe, as digital budgets grow, nearly 80% of marketers’ interactive budgets continue to be spent on customer acquisition tactics, yet over 40% of revenue is generated by past customers (Adobe Digital Index, 2012).

Typically, marketers in the home category follow this convention to an even greater extent. After all, homeowners make only a few major building product purchases in a lifetime. It may take decades for a customer to re-enter the market for your particular product. Plus, research has shown that brand loyalty tends to be low after the sale.

So how can marketing to past customers create demand? For the home category, marketers need to think beyond repurchase. Past customers are proven to have a direct impact on customer acquisition through word-of-mouth advocacy. In fact, according to a study by BIGResearch, word of mouth was found to be the most influential medium in home improvement-related purchases (BIGResearch, 2010).

Word of mouth is becoming increasingly influential, in part, due to a broader cultural shift toward shopping smarter. With information and online reviews at our fingertips anytime and anywhere, fact checking has become a routine part of almost every purchase. When you apply that mentality to the expense of home improvements, the word of mouth effect is amplified.

From garage doors to windows to construction adhesives, our research has repeatedly proven the influence of both offline and online word of mouth in generating interest and even loyalty in the building products category. For this reason, home improvement marketers can no longer afford to ignore past customers.

5 Ways to Kick-Start Word of Mouth

  1. Deliver a Top-Notch Experience — The best way to generate positive word of mouth and online reviews is by delivering an exceptional experience before, during and after the transaction. Good products and services speak for themselves, but so do poor ones. Make sure the experience you deliver is positive from beginning to end. You can measure this by talking to customer service personnel, conducting customer satisfaction surveys, mining social media conversations and searching customer reviews online.
  2. Create a Platform — Don’t just cross your fingers and pray that customers will sing your praises — do something about it! You want positive reviews to be at the top of the search page when in-market consumers begin their online search. This means not only collecting reviews on your own website but also syndicating those reviews to the retailers or sites that top the search results pages. Sound too complex? Consider driving customers to existing review sites like Yelp or Houzz.
  3. Strike While the Iron Is Hot — Capitalize on a potential recommendation before the lead goes cold. Implement standard follow-up practices to evaluate the customer experience and channel happy customers to participate in your advocacy programs. This could occur via email, phone or collateral at the time of sale. You’d be surprised how far a simple “ask” will go in getting people to submit a review. Start by dusting off your customer warranty database and leverage this unused resource for contacts.
  4. Supercharge Your Advocates — Reviews are the first step to influencing a consumer’s purchase decision. Why stop there? It’s no surprise that 92% of consumers trust recommendations from people they know (Nielsen Global, 2011), and this is especially true in high-stakes purchases such as expensive home improvements. Develop a structured referral program and incentivize your best customers to participate. If possible, work a few key selling points into the communication.
  5. Dangle a Carrot — While incentives aren’t always necessary to generate advocacy, they certainly help. Rewards are especially important for referral program participants whose credibility is linked to your product through their recommendations. Choose relevant rewards that are both enticing and reasonable. The reward should be viewed as an expression of appreciation, not a bribe. Typically, for low-frequency purchases, we’ve found that “cash is king” to consumers — something everyone appreciates and can use.

According to one study, “word of mouth is the primary factor behind 20 to 50 percent of all purchasing decisions” (McKinsey, 2010). And a 2013 study by CISCO found that today, offline and online word of mouth is even more influential in U.S. shoppers’ buying decisions than store associates (CISCO, 2013). So why are we still focusing on acquisition alone? At hfa, we see an opportunity to leverage back-of-funnel strategies to drive awareness and consideration among in-market homeowners. This will help ensure your marketing dollars maximize relevant leads and positive ROI.

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