Why Companies Don’t Market to Their Customers

I was recently onsite with a prospect and was told that if this company could simply add $10,000 to every customer renewal each year they would add $400,000,000 in incremental revenue to the bottom line.  This was a significant statement that would have major impact for the organization.  However, there were significant barriers that existed that prevented this revenue from being realized.


In my work with many large enterprise B2B organizations, I find this is the case more often than not. Sadly, most organizations do a poor job selling back into their customer base and as a result are missing a huge opportunity to generate revenue.

Everyone has seen the studies that state it costs twice as much to acquire a new customer as it does sell into a current one.  If this is true, then why are so many organizations so bad at doing this?  How can an organization have metrics that show $400 million in revenue is within their reach, but not be able to capitalize on it?

There are several consistencies across organizations that I see and if addressed, could help organizations add significant dollars to the bottom line.

  1. Lack of Data Governance

The plain truth is that most organizations have no clear picture of their customer.  Data sits in different parts of the organization, CRM systems are full of duplicates, finance has their own database that consists of procurement contacts and there is no one database that provides a holistic view of the customer.  In one recent meeting I had, one of the operations folks said, “Let’s just hope a customer does not ask one of our reps what products they own, because we could not tell them.”

These issues stem from a fundamental lack of data governance across the organization.  With the multitude of systems and information that exists in an enterprise, things can and often do get messy quickly and organizations need to define data standards to govern:

–          Who has access to the data and what levels of control do they have?

–          What systems need to be integrated to show a complete view of the customer?

–          What is the data hygiene process?

These are just a few of the things that an organization needs to think about in terms of data in order to make the most from it. Without the proper governance in place, little value will come from your data.

  1. Lack of Demand Generation Focus

Typically when I speak about Demand Generation, marketers automatically assume that I am referring to generating new business. While new business should be a focus for Demand Generation, it should not be the sole focus. Fundamentally, the same principles of Demand Generation apply in any sales instance –you need to Engage, Nurture and Convert your buyer.  In the case of selling to your current customers, you are simply looking to expand the relationship with them. This is easier than starting from scratch as there is already a level of engagement there and a relationship.

With all of the potential revenue that is to be had from current customers, organizations need to develop specific programs aimed at creating demand among their customers.  In doing so, they will not only see an improvement in their retention rates, but a vast improvement in their customer lifetime value.

  1. Lack of Analytics

As mentioned above, many organizations have data scattered all over their organizations which makes it virtually impossible to market well to your customer base.  However, even organizations that do have control over their data often lack the analytics necessary to determine the best approach to sell effectively to their customers.  This can be remedied however, given the numerous tools that are available to help with analytics for marketers today.

The analysis of data to inform decisions and provide insights into marketing and sales is still a huge gap in many organizations.  In terms of generating more from your customer base…this is costing organizations millions.

For marketing leaders that want to make a profound impact to their companies’ revenue, data analysis should be made a top priority.

Mining the install base may not be as sexy for marketing and sales as chasing the next big new deal or beating out a competitor for a new logo.  However, it is often times a more profitable venture and will have a significant impact business.

Author: Carlos Hidalgo @cahidalgo is CEO and Principal, ANNUITAS

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