BUYING INTO A MYTH?
Marketing Myth #3: Customer loyalty beats customer acquisition
While B2B marketers tend to focus on the “bird in the hand” – cultivating existing customers – pursuing the “two in the bush” may be a wiser long-term strategy. Decades of research by the Ehrenberg-Bass Institute suggests brands mainly grow by acquiring new customers.
Some surprising results
After analyzing 1,500 marketing campaigns, researchers Les Binet and Peter Field found those “that make brand loyalty their primary focus underperform on every business metric.”2 Surprisingly, this holds true in B2B, too, despite its emphasis on relationships. So… what gives?
Loyalty is, well, very divided
Part of the issue, as defined by Ehrenberg-Bass’s Duplication of Purchase Law, is that most customers aren’t exclusive to one brand. Particularly in B2B, where many brands compete in many categories, there is a LOT of customer sharing. Buyers often choose different brands for different needs or categories, limiting opportunities for growth.
What about the beloved niche brand?
While there are smaller brands with high loyalty – think Apple back in the day – niche brand strategies are not often successful. Typically, brands with higher market share have higher loyalty – a good argument for casting a wider net to increase your customer base.
How can you win more of the market?
Myth-busting wisdom says: divert attention from competitors and grow your market share by focusing on branding. The more people know you, the more new customers you can acquire – and the more your loyalty and growth will increase.
Are you putting too much emphasis on loyalty marketing at the expense of acquisition? Time to rethink your marketing investments? Let’s talk ›
1 LinkedIn 2019 ROI Survey, LinkedIn 2019 Brand Advertising Principles Survey
2 The B2B Institute, The 5 Principles of Growth in B2B Marketing
3 The B2B Institute, The Double Jeopardy Law in B2B Shows the Way to Grow
Marketing Myth #1: Demand generation is king ›
Marketing Myth #2: Cutting marketing budgets is wise in a recession ›
Marketing Myth #4: Well-known brands don’t have awareness problems ›
Marketing Myth #5: B2B campaigns should be rational, not emotional ›
Marketing Myth #6: The purchase funnel is still a thing ›