15 Dec Bowtie Marketing
Bowtie marketing London – For many years, the idea of the sales funnel (or sales pipeline) has been accepted as a core principle in formulating successful marketing strategies. But, whilst it is a valuable concept in itself, it fails to cover the full scope and nature of the most valuable interactions between a business and its customers. The approach is primarily focused at considering how new customers are acquired, without any recognition of the fact that business from existing customers is typically substantially more valuable, and invariably significantly less expensive – according to many industry experts by a multiple of seven to ten.
However, another core principle of marketing is to optimise customer lifetime value (CLV), which outlines the means by which profit is earned over the duration of a customer’s relationship with a business. A new model is suggested as a more valuable analogy that combines both these elements, and which we refer to as the ‘Bowtie Marketing’ model.
The idea of the sales funnel is that the people you market to move through successive stages down through a pipeline. The AIDA model explains the process of the sales funnel stages best. At the outset – represented by its widest part– there is awareness amongst potential customers that they have a want or a need, and as a result of media activity (such as pay per click (PPC) advertising, social media promotion, email marketing or search engine optimisation (SEO), for instance) have become aware of your business.
The next stage in the process is an expression of interest, where the customer makes contact with you in some appropriate manner, and starts to ask questions and/or request additional information, after which comes their desire to buy, which then leads to action in the form of a purchase of your product or service. And so the bottom end of the sales funnel is reached.
The entire global population can conceivably enter your funnel. However, it is normal to create customer segments and personas that allow you to target your marketing efforts towards suspect customers who display common types of demographic and psychographic traits that you feel represent your target market accurately. It is only when suspects make contact, such as by visiting your website, that they turn from a suspect into a prospect. The further down the funnel they go, the warmer a prospect they become.
The job of marketing is first to get as many people as possible into the top of the funnel, then, in turn, to persuade as many of them as possible to move through each successive stage until they make a purchase. It, therefore, starts with a marketing strategy to secure the attention of the greatest possible number of potential customers. Within the overall population, likely groups of buyers are identified through customer segmentation, and messages refined with the help of customer personas.
A suitable mix of marketing tools is then deployed: an appealing website (optimised for search engine using SEO), social media, email, PR, digital advertising, conferences, and exhibitions, etc., according to your organisation’s specific needs, articulated in your business plan and sales forecasts. This marketing activity might be backed up by tactical initiatives designed to be specific to prospects moving down through the various stages of the funnel.
We often talk to our clients about customer touch points – be they digital or physical in nature – that occur during the sales process, and how crucial it is to deliver a consistent brand experience at every single point of contact. The only way to achieve such consistency is to have a clear brand proposition in place so that an organisation’s sales and marketing efforts reflect its desired vision and values. This ensures that all communications encompass the right attitude and tone of voice and that behaviour is in line with agreed principles and standards.
Customer lifetime value (CLV)
Before we talk more about the bowtie marketing funnel, let’s take a quick look at customer lifetime value (CLV)
A customer who has made an initial purchase can be thought of as an adopter. The marketing need here is to affirm their decision to buy, and perhaps to seek information that will enable the business to refine its marketing efforts further in the future. It’s the perfect opportunity to request feedback about their buying experience and to try and find out what swung their decision to buy the product from your organisation.
Think about how successful internet businesses such as Amazon and eBay follow up every sale with a thank you message or a congratulatory note, followed by a request for a review of the purchase and/or feedback on the brand experience. The good news is that you can do the same, easily and cheaply, using today’s modern technologies. The primary investment is in planning and set-up. After that, it is all about ongoing maintenance and management.
If adopters are nurtured, some will become loyalists, returning to make additional purchases. These could be repeat sales of the same product or service, the cross-sale purchase of complementary products or services, or upselling them to a better solution or package to suit their needs. Their loyalty could be encouraged and rewarded through offers unavailable to the broader public, such as are offered by Tesco to their Club Card customers, for example. As a result, some of these loyalists may become advocates, which means that they are happy to give favourable mentions to the business and its products in their interactions with others – interactions which are amplified enormously these days through social media sharing. At the righthand edge of the bowtie marketing model are your ultimate customers: ambassadors.
These are super-advocates who actively promote your brand, their opinions being widely shared and respected, even to the extent of going viral. They are as valuable to your business as you or any of your colleagues, perhaps more so: independent voices who eulogise about your products and services to their friends and online followers, all of whom are more likely to trust their judgement than a clever marketing campaign.
You can ask your customers to provide referrals at this point in the model, as long as it is perceived to be a win-win scenario for both the referrer and the referee. As you would expect, the number of people in each group gets successively less further to the right of the bowtie knot you go. On this side of the bow, the widening out represents an increase in the relative value of individual customers.
Bowtie marketing plan
The bowtie marketing model doesn’t dispense with the sales funnel, nor does it disregard customer lifetime value (CLV). Instead, the funnel is turned on its side and a second funnel to represent CLV marketing is added as a mirror image. The bottom of the sales funnel becomes the knot in the centre of the bowtie, which is the point at which a new customer first makes a purchase. Everything to the left of the knot is as it was for the funnel, but to the right is a description of the ongoing relationship between you and your customer reflecting the CLV proposition.
While the sales funnel is focused on gaining and converting as many new customers as possible on an ongoing basis, the bowtie model puts equal emphasis on developing relationships with existing customers. This is surely common sense, given how much more expensive it normally is to win new customers against making further sales to existing ones. But all around us are examples of businesses who seem entirely focused on the former.
How often have you seen a company offer better deals to new customers than to existing ones? In the service sector particularly, where by definition an ongoing relationship of some sort between the provider and the customer exists, rewarding loyalty seems to have gone out of the window (think car insurance or heating supplier, for example). Consumers are urged by independent experts to leave the poor value deals they’re getting from their existing provider in favour of sign-up incentives on offer elsewhere. They may check with their existing provider, to see if the better terms available elsewhere can be matched. Surprise, surprise, they often can be, but this begs the question: “Why didn’t you offer me this deal in the first place…?!”
This type of scenario is indicative of great attention being paid to the sales funnel by many organisations whilst lip service is being paid to dealing ethically with existing customers – in fact, the aim seems to be to fleece rather than to flourish. What is obviously needed is a more holistic approach, as is suggested by the bowtie marketing principle. At least as much attention should be paid to a business’s churn rate – the rate at which it loses customers – as on sales figures, to ensure that all the effort expended on winning customers in the first place is optimised down the line.
Ultimately, customers stay with businesses they trust to offer not just good products or services, but also to have their best interests at heart. Genuine relationships always transcend the mere transactional to become emotional ones, where a customer feels the brand is integral to their lives (you probably know people who profess they would cease to function without their iPhone…).
In some ways, the bowtie marketing model harkens back to the days when personal service was paramount (ironically enough, to a time when more people wore bow ties…). With the advent of mass production and mass marketing, perhaps the personal connection was lost – in truth if not in intent – and perhaps the sales funnel was the best model available to many organisations. Now, thanks to exciting new technologies, we can take advantage of CRM systems and marketing automation to genuinely connect with people as individuals. This enterprising approach to business is not just for the likes of Amazon, Apple, and eBay – the bowtie marketing model is an option for every single organisation around the world – and that includes SMEs and start-ups too.
Keep up to date with Bowtie Marketing
The world of bowtie marketing changes all the time. To keep up to date with all the latest news is almost impossible, but you can keep on top of things by following us on social media – Twitter, Facebook and LinkedIn. If you would like to have a conversation with us about bowtie marketing, please contact Stephen Brown at Abacus marketing agency London on 020 3858 7836 or [email protected] – you can also visit our website at www.abacusmarketing.co.uk to find out more about bowtie marketing.