What is Customer Marketing? Why is it Important?

Shahin Hoda 10  mins read June 20th, 2023 (Updated: February 23rd, 2024)


Past research has shown that over 80% of a B2B company's profits come from 20% of existing customers. The keyword here is existing.

What is Customer Marketing? Why is it Important?

Marketing to your existing customer base is essential. Here are more statistics highlighting why you should take my statement seriously. 

  • A 5% increase in customer retention can translate to a 25% to 95% increase in profit. 
  • Existing buyers spend 300% more than new ones.
  • It takes five times as much money to acquire a new customer versus retaining an existing one.

Despite the above market studies, too many organisations prioritise acquisition over retention and growth. 

They spend heavily to acquire new customers but under-invest in post-purchase initiatives to keep existing account decision-makers happy and engaged. The above reactive approach is risky in an era where buyers can easily switch to competitors who better meet their needs.

This is where a powerful customer marketing strategy comes in handy.

Customer marketing focuses on understanding and catering to the specific needs and preferences of a company's existing accounts to drive brand, boost customer loyalty, retain customers and accelerate ongoing sales.

In this article, I will start with definitions and cover the two fundamental values of an effective customer marketing strategy: customer retention and customer growth. I will then talk about the metrics used to measure each.

We will also explore the benefits of having a solid customer marketing strategy and how to build and implement one.

    First Name *

    Last Name *

    Work Email *

    Phone Number *

    What can we help with? *

    We don't share your details with anyone

    What is Customer Marketing?

    What is Customer Marketing?

    Customer marketing refers to marketing efforts focused on existing customers. It aims to maximise the customer lifetime value.

    As mentioned previously, two key components underpin customer marketing: customer retention and customer growth.

    Customer retention is the strategic ability of a company to retain its customers over a specific period.

    For example, consider a fictitious cloud security software company called SecuriTech that sells to large enterprises. One of their customers is a Fortune-100 bank, Delta National. After a 6-month assessment, Delta National signed a 12-month, $1.2 million contract with SecuriTech. If SecuriTech can retain Delta National as a customer after the first year of its contract and achieve a renewal at the same annual contract value, it means that SecuriTech has successfully achieved customer retention.

    Conversely, customer growth involves expanding relationships with existing customers by persuading them to buy more or upgrade to higher-value products or services. 

    Continuing the above fictitious story, let's say SecuriTech proposes new products tailored to Delta National's needs. Delta National ends up expanding its contract by $225K over the next year to deploy additional security solutions, increasing its spending by ~19 %. This would be an example of customer growth.

    Why is Customer Marketing Important?

    Why is Customer Marketing Important?

    In the introduction of this article, I talked briefly about why a strong customer marketing strategy is essential for B2B businesses. Let's dive into that more from the perspective of the current context.

    In today's challenging economic climate, B2B businesses are feeling the pinch. The macroeconomic situation has led to budget cuts and a slowdown in new acquisitions, making customer acquisition costs a significant pain point. As these costs continue to rise, businesses are being forced to re-evaluate their strategies.

    Customer retention emerges as a critical factor for survival in this scenario. 

    Not only does retaining existing customers help keep costs down, but it also fosters a loyal customer base that can offer much-needed stability in uncertain times. 

    So, while customer marketing, in general, should be a top priority for you as a business, it has a larger role to play considering the state of our industry today. 

    Remember, it's not just about acquiring new customers; it's about keeping the ones you already have and turning them into loyal brand advocates for your product or service.

    Benefits of Customer Marketing

    Benefits of Customer Marketing

    Now that we understand why customer marketing is important, let's examine some of its tangible benefits.

    Benefit 1: Higher Customer Lifetime Value (CLTV): 

    When customers stick around, they spend more money with you over time. Studies show that CLTV can be up to 10 times higher than the initial purchase.

    Benefit 2: Improved Margins

    You only need to spend money to acquire a customer once, but you can make money from them multiple times. This means that your margins will be higher if you can keep customers coming back.

    Benefit 3: Lower Churn 

    When you focus on providing a great post-purchase experience, you can reduce customer churn. Even a 5% reduction in churn can lead to a 25% increase in profits.

    Benefit 4: Predictability 

    When customers stay longer, your revenue becomes more dependable and consistent. This makes it easier to forecast your future earnings.

    Benefit 5: Brand Advocacy 

    Delighted customers become enthusiastic promoters and refer others to your business. In fact, 83% of satisfied customers are willing to recommend a brand.

    Benefit 6: Competitive Advantage

    It's hard for competitors to replicate deep customer relationships, high customer satisfaction, and even brand loyalty. This gives you a sustainable competitive advantage.

    How to Build a Successful Customer Marketing Strategy?

    How to Build a Successful Customer Marketing Strategy?

    All right, we are now deep in this topic, and this section will give you some pointers on how to develop a killer customer marketing strategy. 

    If you want to dive more into the points below, I recommend listening to this episode of the Growth Colony Podcast with Steve Gershik. 

    1. Customer Experience is King

    Nothing matters more than giving your current customers the best experience possible. Think about their journey with you, right from the start to them becoming your biggest fans. Look for chances to add some sparkle at each stage. If there are any hiccups in the experience that might make them leave, sort them out. Think of customer marketing as a never-ending commitment to your accounts, not just a flash in the pan.

    2. Get Nerdy with Your Metrics

    You've got to know your numbers: NPS, retention rate, churn rate, customer lifetime value, how many referrals you're getting, expansion revenue, and so on. Set some targets to measure how well you're doing. These numbers will help you argue for more investment in your customer marketing strategies and ensure everything you do is based on solid data.

    3. Spread the Word Internally

    Customer marketing is still relatively new, so make sure everyone in your team understands what it is, why it's a big deal and how it helps the business. Use examples of other companies that have smashed it through retention and growth. Frame customer marketing in a way that aligns with your company goals to get the big bosses on board. 

    4. Take a Hard Look at What You're Already Doing

    Time for some self-reflection. What are you currently doing to keep customers engaged after they've bought from you? Look at your onboarding process, education programs, cross-sell and upsell offers, advocacy programs, and so on. Spot any areas that need some work and figure out how much revenue or retention you could get by making them better. This will help you make your case.

    5. Become BFFs with Your Customer Success Managers

    You've got to work hand-in-hand with your customer success and account management teams. Get some of your marketing peeps working directly with customer success to create impactful programs. Don't leave all the post-purchase marketing to customer success, teamwork makes the dream work.

    6. Map Out the Whole Customer Lifetime Journey

    You've probably mapped out the customer journey through to purchase, but don't stop there. Extend it to cover everything from onboarding and first use to renewal and advocacy. Look for any problems or opportunities across the customer usage lifecycle. Turn your insights into specific outcomes and programs to make the journey even better.

    7. Create a Solid Retention Plan

    You need a game plan for connecting with new customers the moment they hit 'Buy'. Your strategy should include initiatives focused on educating, delivering value, and building relationships and loyalty. A smooth onboarding process is a must, and consistent follow-ups throughout the first 90-180 days are key.

    8. Get Your Cross-Sell and Upsell Game On

    Support your current customers in expanding their use of your products. Use education and personalised offers based on their needs and behaviours. Make it an easy decision for them to upgrade or buy more from you. Cross-selling and upselling can seriously fuel your growth, so make sure you've got a strategy for both.

    9. Create a Customer Hangout

    Bringing customers together in a community lets them connect, share tips and support each other. This creates more brand advocates, and champions, and opens new partnership opportunities. Give them the tools to engage with each other.

    10. Develop Advocacy & Customer Loyalty Programs

    Make it super easy for your happiest customers to shout about how great you are. Develop tools, campaigns, incentives for referrals, social media reviews, customer stories, case studies, and more. Turn your satisfied customers into your biggest cheerleaders.

    The above notes are not exhaustive, but they will serve as a good starting point to begin your journey towards customer marketing. 

    Effective Customer-Driven Marketing Strategic Tactics

    Effective Customer-Driven Marketing Strategic Tactics

    In addition to the above guidelines, let's chat about some effective sub-strategies and tactics that will further ramp up your customer marketing game. 

    1. A Warm Welcome with Onboarding Marketing:

    Think about onboarding marketing, like hosting a party. We want our new guests (or customers) to feel comfortable and ready to join the fun as soon as they walk through the door. This means a friendly hello, giving them a tour (or resources and advice), checking in to see if they need anything, and offering tips to enhance their experience. Why do we do this? Well, we really don't want our party guests (or customers) to leave early (that's customer churn in the business talk). 

    2. Empowerment through Education Marketing 

    This is where we become the ultimate guides for our customers. Offering how-to videos, engaging blog posts, live training sessions, customer communities, and stimulating community discussions to help them get the most out of our product or service. It's like providing a map that leads to greater customer satisfaction, expansion, and retention.

    3. Personalisation via Customer Segmentation 

    Everyone likes to feel special, right? So, let's tailor our communication and offers to fit each customer's unique needs and behaviours. It's about understanding and prioritising, whether it's high-value, long-term or at-risk accounts, like a tailor creating the perfect suit for each individual client.

    4. Enhanced Engagement with Cross-sell/Upsell Offers:

    This is like suggesting the perfect dessert to go with the main course. By promoting additional or premium products and services at the right time and based on the customer's specific needs, we can offer a more satisfying overall experience, which encourages the adoption of these new offerings.

    5. Quantifying Success 

    Finally, we need to measure our impact. This is where we look at retention rates, Net Promoter Score (NPS), Customer Lifetime Value (CLTV), referral revenue, and other key performance metrics. It's like stepping on the scales after a diet, it's important to know if our efforts are paying off. 

    Ultimately, it's all about creating a positive, personalised experience for our customers that keeps them coming back for more.

    How Does Customer Marketing Strategy Tie Back With ABM?

    How Does Customer Marketing Strategy Tie Back With ABM?

    xGrowth is all about ABM, so I want to discuss how your customer marketing efforts can be tied back to Account-Based Marketing.

    Customer marketing and Account-Based Marketing (ABM) are two powerful strategies that businesses use to drive growth. When used independently, they can yield substantial results. However, when integrated, they create an even more impactful strategy that can significantly boost customer engagement and foster long-term relationships. 

    The Role of ABM in Business Growth

    ABM, as you might already know, is a strategic approach to business marketing in which an organisation treats individual customer accounts as markets of their own. The benefits of ABM are many, but the gist of it is that by focusing on a select group of customers, businesses can personalise their marketing efforts to cater to the specific needs and preferences of their high-value clients. This not only leads to greater efficiency but also boosts return on investment (ROI).

    Enhancing Customer Marketing Through ABM

    While customer marketing aims to maximise the value of existing customers through upselling, cross-selling, and advocacy, the integration of ABM can take this strategy to new heights. 

    For instance, ABM metrics can provide valuable insights that can be used to refine customer marketing strategies. By analysing the engagement and response rates of high-value accounts, companies can identify successful tactics that can be applied to their broader customer marketing strategies. This creates a synergy that reinforces the effectiveness of both ABM and other customer marketing campaigns.

    The Integration Advantage

    When customer marketing and ABM are integrated, businesses can significantly enhance their customer engagement. This is because both strategies prioritise personalisation and engagement, making them complementary. 

    With ABM's focus on high-value accounts and customer marketing's focus on maximising the value of existing customers, their integration provides an all-encompassing approach to customer engagement.

    Moreover, the integration of these two strategies enables businesses to build long-term relationships with their customers. By understanding the needs and preferences of individual accounts through ABM and then using this information to personalise customer marketing efforts, businesses can foster a deeper connection with their customers. This not only enhances customer loyalty but also drives repeat business, thereby fueling growth.

    At xGrowth, we firmly believe that a robust customer marketing strategy can be seamlessly integrated with Account-Based Marketing (ABM). Drawing from these successful ABM campaign examples in Singapore, we see that the personalised approach of ABM, guided by an ABM strategy template, complements customer marketing efforts. 

    Customer Marketing Metrics

    Customer Marketing Metrics

    When it comes to metrics, I would be remiss, not to mention the 3-Rs of ABM. Even if the topic of this article is customer marketing, eventually, we are trying to impact our reputation in the market, relationships with customers and revenue positively. The below metrics will help you gauge the impact of your customer marketing initiatives on these 3 Rs.

    Important Customer Retention Metrics

    Customer Retention Rate (CRR): At the end of a given period, the number of customers who continue to do business with a company is known as its Customer Retention Rate (CRR). Leading companies in the B2B Saas space typically have a CRR range of 80-90%.

    Churn Rate: Churn Rate is defined as the percentage of customers lost during a period. B2B organisations should aim for this number to be 5% or less.

    Customer Lifetime Value (CLTV): Revenue generated by a customer over their lifetime. Higher CLTV means higher customer value.

    Net Promoter Score (NPS): NPS can be calculated by asking customers, "How likely are you to recommend our company to a friend or colleague?" on a scale of 0-10. Subtract % of detractors (0-6) from % of promoters (9-10).

    It measures customer satisfaction, experience and loyalty. Top brands often have an NPS of 50 or higher.

    Important Customer Growth Metrics 

    Expansion Revenue: The increase in spending from existing customers. Aim for at least 20-50% revenue growth from annual expansions.

    Upsell/Cross-sell rate: Percentage of customers who buy additional or upgraded products. It should be at least 30-50% of the yearly customer base.

    Share of wallet: Percentage of the customer's total budget allocated to your company. Strive for a 5-10% share of the wallet for key accounts.

    Referral rate: Percentage of new customers coming from existing ones. The goal should be at least 2-3% of new customers from referrals.

    Final Thoughts

    Customer marketing is proving to drive tangible results for leading B2B companies. Focusing on experience, customer loyalty, retention, and growth yields higher lifetime value, lower cost of sales, improved margins, brand advocacy and predictable revenue. 

    Combine that with ABM, and you have an unbeatable combination.

    I hope this article was helpful to you. If you need expert guidance on your next customer marketing or ABM campaign, please contact us here.

    Frequently Asked Questions

    What is Customer Centric Marketing?

    Customer-centric marketing is a marketing strategy that places the customer at the centre of marketing design and delivery.

    In a broader sense, customer-centric marketing is an approach that prioritises customers' needs, preferences, and expectations in the development and execution of marketing strategies. It involves understanding customer behaviour, using customer feedback, personalising marketing messages, and building long-term customer relationships. The aim is to provide a superior customer experience that drives loyalty and enhances business profitability.


    What is The Difference Between Customer Marketing and Customer-Centric Marketing?

    Let's talk about this in the context of a B2B SaaS company; let's call it "TechRise".

    In the case of customer marketing, TechRise would focus on nurturing relationships with its existing customers. They'd do this by launching tailored emails sharing tips on how to use their software more effectively, offering special discounts on upgrades, or even hosting webinars to educate customers on industry trends. This is about maximising the value of existing customers and encouraging their loyalty

    Conversely, customer-centric marketing is more about shaping the entire business around the customer's needs and wants. For TechRise, this could mean investing in user-friendly product design, offering 24/7 customer support, or even evolving their product based on customer feedback. It's not about selling more to customers but rather about ensuring that everything they do is designed to solve their customers' problems and enhance their experience

    In essence, while customer marketing is about 'selling' to the customer, customer-centric marketing is about 'serving' the customer. Both are important, but they each require a different focus and approach. The most successful companies in the B2B SaaS industry, like TechRise, find a balance between the two to drive growth and customer satisfaction.


    hello world!

    Related Resources

    Go-to-Market Strategy Examples
    Go-to-Market Strategy Examples

    Introduction A Go-to-Market Strategy is a comprehensive marketing plan that outlines how a company will effectively reach and engage with its target audience to launch and successfully promote a new product or service. It ensures focus and alignment across all your teams and provides a framework to measure success. By clearly defining your target customer, […]

    Full Article
    Go-to-Market Phases
    Go-to-Market Phases

    Introduction RetailPulse is a B2B SaaS company that has developed a cutting-edge customer analytics platform called CustomerIQ. CustomerIQ is specifically designed to help retail enterprises derive valuable insights from their customer data. The platform integrates with various sources, including point-of-sale systems, e-commerce platforms, and customer relationship management (CRM) software. Despite CustomerIQ's clear advantages, RetailPulse faces […]

    Full Article
    xGrowth brings a very structured approach to ABM. It’s been amazing working with you.

    michele clarke
    Michele Clarke
    Head of Marketing, APAC Secure Code Warrior
    When I think ABM, I think xGrowth. xGrowth were 100% committed, the whole team was just like our business partner. I would say you are not a business vendor; you are our business partner.
    reena misra
    Reena Misra
    ANZ Marketing Leader