Customer success metrics are those that quantify customer success and which help a business ensure that customers reach the desired outcome from using its products and services. Customer success metrics determine what sort of customer experience the business is delivering. In other words, is the product or service having a positive impact on the customer? Are they recommending it to their friends and family? These metrics help the business reach a point where recurring revenue and customer lifetime value are being created consistently. When used effectively, they deliver important insights across key areas such as customer churn, adaptation rate, and production satisfaction.
Aspect
Explanation
Definition
Customer Success Metrics are key performance indicators (KPIs) used to measure the effectiveness of a company’s efforts in ensuring customer satisfaction and achieving positive outcomes. These metrics focus on gauging how well a company is delivering value and support to its customers.
Key Concepts
– Customer Satisfaction: A measure of how content or happy customers are with the company’s products or services. – Customer Retention: The rate at which customers continue to do business with the company over time. – Churn Rate: The percentage of customers who stop using the company’s products or services within a specified period. – Net Promoter Score (NPS): A metric that assesses customer loyalty and willingness to recommend the company to others. – Customer Lifetime Value (CLV): The projected revenue a customer is expected to generate throughout their relationship with the company. – Customer Effort Score (CES): Measures how easy or difficult it is for customers to achieve their goals when interacting with the company. – Renewal Rate: The percentage of customers who renew their subscriptions or contracts with the company. – Expansion Revenue: Additional revenue generated from existing customers through upselling or cross-selling.
Characteristics
– Customer-Centric: Metrics are centered around the customer’s experience and satisfaction. – Data-Driven: Utilizes data and analytics to measure and track customer success. – Proactive: Aims to anticipate and address customer needs before issues arise. – Continuous Improvement: Encourages ongoing efforts to enhance the customer experience and achieve better outcomes.
Examples
– Customer Satisfaction Score (CSAT): Measures customer satisfaction through surveys or feedback. – Customer Churn Rate: Calculates the percentage of customers lost during a specific period. – NPS Score: Determines the likelihood of customers recommending the company. – CLV Calculation: Predicts the long-term value of a customer based on past behavior and spending. – CES Score: Assesses the ease of customer interactions with the company’s support or services.
Advantages
– Customer-Centric Focus: Puts the customer at the forefront of business operations. – Retention and Growth: Helps retain existing customers and identifies opportunities for revenue growth. – Data-Backed Decisions: Informs data-driven decision-making and strategies. – Early Issue Detection: Enables early detection and resolution of customer issues.
Challenges
– Data Quality: Relies on accurate and reliable data, which can be challenging to obtain. – Interpreting Metrics: Requires interpretation to understand the root causes of issues or successes. – Changing Customer Needs: Metrics may need adjustment as customer needs and expectations evolve.
Adoption Trends
The adoption of Customer Success Metrics has increased significantly as companies recognize the importance of retaining and satisfying customers to drive long-term success. As the subscription-based model becomes more prevalent in various industries, measuring customer success has become a critical part of business strategies.
Conclusion
Customer Success Metrics provide valuable insights into how well a company is meeting customer needs and expectations. By focusing on key indicators such as satisfaction, retention, and revenue growth, organizations can proactively improve the customer experience and drive business success. Continuously monitoring and adapting these metrics is essential in a dynamic business environment.
The Net Promoter Score (NPS) is a measure of the ability of a product or service to attract word-of-mouth advertising. NPS is a crucial part of any marketingstrategy since attracting and then retaining customers means they are more likely to recommend a business to others.
Net promoter score (NPS) is derived from asking consumers one simple question: “On a scale of 1 to 10, how likely are you to recommend this product or service?”
Ratings can be considered thusly:
Detractors
Scores between 0 and 6 denote unsatisfied consumers who tend to discourage others from purchasing the product or service.
Passives
A score of 7 or 8 is likely to be given by a consumer who is satisfied but not so satisfied that they’re willing to tell others.
Promoters
A score of 9 or 10 is the most desirable.
These are loyal and passionate consumers who recommend products and services to friends and family.
After rating their experience, the customer is asked to explain their decision.
In this way, the NPS provides both qualitative and quantitative customer success data.
One of the first mentions of customer lifetime value was in the 1988 book Database Marketing: Strategy and Implementation written by Robert Shaw and Merlin Stone. Customer lifetime value (CLV) represents the value of a customer to a company over a period of time. It represents a critical business metric, especially for SaaS or recurring revenue-based businesses.
Customer lifetime value (CLV) measures the total value a customer is likely to generate over the course of their entire relationship with the business.
When CLV increases, the business knows its products and services are contributing to customer success.
Customer lifetime value can be calculated by multiplying the average purchase frequency rate by the average purchase value.
The resultant number should then be multiplied by the average customer lifespan.
There are two primary ways to calculate the CLV as it follows:
Customer acquisition cost (CAC) is an important metric since it determines how much it costs the business to acquire a new customer.
CAC helps the business better direct its resources and maximize return on investment.
When used with customer lifetime value, CAC tells the business whether it is likely to profit from acquiring new customers over the long term.
To calculate customer acquisition cost, add the costs associated with sales and marketing and then divide that sum by the number of new customers acquired.
Another form of CAC is the CAC Payback Ratio, computed as it follows:
CAC payback is a metric used in SaaS and eCommerce to determine how long it will take to recoup the costs of customer acquisition. Having an understanding of the CAC payback is critical for SaaS and e-commerce companies to structure a proper distribution, sales, and marketingstrategy.
Customer churn rate
Customer churn rate captures the percentage of customers who cease using a product or service for whatever reason.
This may encompass closed accounts, canceled subscriptions, and the loss of recurring value, business, or contracts.
Customer churn rate can be determined by dividing the total number of churned customers by the total number of all customers.
ARPU, or average revenue per user, is a key metric for attention merchants like Facebook. It assesses the ability of the platform to monetize its users. For instance, by the end of 2022, Meta’s ARPU worldwide was $10.86. While in US & Canada, it was $58.77; in Europe, it was $17.29; in Asia, $4.61 and in the rest of the world, it was $3.52.
Average revenue per user (ARPU) – also known as average revenue per unit – is the average revenue the business receives from a customer over a specific period.
ARPU is a customer success metric commonly used by social media, telecommunications, and SaaS companies to better understand profit potential and their customers.
It also can be used to make financial forecasts and compare products and services to those offered by a competitor.
ARPU is calculated by determining the total revenue and dividing that figure by the average number of users over a given period. For most businesses, this will be monthly.
ARPU will depend on the type of business (B2B vs B2C) and platform. For in stance Pinterest ARPU is much lower than Facebook ARPU:
Between Q4 2022 and Q4 2023, worldwide ARPU saw a slight increase from $1.96 to $2.00, indicating a positive yet slow trend in revenue per user on a global scale.
In the US market, the increase in ARPU was also slight, rising from $7.60 in Q4 2022 to $8.07 in Q4 2023, reflecting a slow growth in revenue per user specifically in the US market.
Another key aspect to take into account when it comes to ARPU, you want to balance it with the value driven by power users.
Indeed, especially on user-generated platforms, power users matter way more than average users, as they drive much more value to it.
As a trivial example, take the case of a popular account on Twitter or Facebook that is actively engaged and that, when posting, generates thousands of shares, likes, and more.
That account will be much more valuable than the average account.
Platform business models like Facebook, Twitter, Instagram, and TikTok are well aware of those power users’ accounts, which are tracked consistently to make sure they can keep generating value for many other users.
Monthly recurring revenue
Monthly recurring revenue (MRR) is, perhaps unsurprisingly, a customer success metric favored by SaaS and other subscription-based companies.
MRR is a normalized calculation of predictable monthly revenue and is used to measure financial growth and momentum, among other things.
To calculate MRR, simply multiply the average revenue per user by the total number of monthly users.
Additional Customer Success Metrics
Customer Retention Cost (CRC):
CRC calculates the cost associated with retaining an existing customer, including expenses related to support, account management, and loyalty programs.
Customer Engagement Rate:
This metric measures how actively engaged customers are with a product or service, including interactions, logins, clicks, or other relevant actions.
Customer Referral Rate:
Customer referral rate quantifies the number of new customers acquired through referrals from existing customers.
Customer Lifetime Value (CLV) by Segment:
CLV can be analyzed by customer segments (e.g., by industry, geography, or product usage), providing insights into which segments are most valuable.
Customer Effort (CE) Trends:
Analyzing trends in customer effort scores over time can reveal whether efforts to reduce customer effort are effective.
Product Feature Adoption Rate:
This metric focuses on the adoption rates of specific product features, helping identify which features are most valued by customers.
Renewal Rate:
Renewal rate measures the percentage of customers who renew their subscriptions or contracts when they come up for renewal.
Customer Health Index:
Similar to the customer health score, the customer health index assesses the overall health of customer relationships but may use a different scoring methodology.
Customer Satisfaction Index (CSI):
CSI is a composite index that combines various customer satisfaction metrics into a single score to gauge overall satisfaction.
Customer Churn Reasons:
Identifying and categorizing the reasons customers churn can help businesses address specific issues and improve customer retention strategies.
Customer Effort Reduction Rate:
This metric quantifies the success of efforts to reduce customer effort, such as streamlining processes or improving user interfaces.
Upsell and Cross-Sell Rates:
These rates track the success of upselling (selling higher-tier products or features) and cross-selling (selling complementary products or services) to existing customers.
Customer Loyalty Score:
Customer loyalty scores measure the strength of customer loyalty and may be based on factors like repeat purchases, referrals, or participation in loyalty programs.
Customer Sentiment Analysis:
Using natural language processing (NLP), sentiment analysis assesses customer sentiment in reviews, social media mentions, and feedback to gauge overall sentiment trends.
Customer Success Team Efficiency:
This metric evaluates the efficiency of customer success teams by measuring the number of accounts or customers managed per team member.
Customer Journey Completion Rate:
Customer journey completion rate assesses the percentage of customers who successfully complete key milestones or tasks within the customer journey.
Time to Value (TTV):
TTV measures the time it takes for customers to realize value from a product or service after their initial interaction or purchase.
Product Stickiness:
Product stickiness measures how engaged and dependent customers are on a product, making it less likely for them to switch to a competitor.
User Adoption Funnel:
This metric tracks the progression of users through various stages of product adoption, helping identify where users may drop off or struggle.
Customer Impact Score:
The customer impact score assesses the positive impact a business has on its customers, considering factors like cost savings, efficiency gains, and revenue growth.
Key takeaways
Customer success metrics are those that quantify customer success and which help a business ensure that customers reach a desired outcome from using its products and services.
Customer success metrics include Net Promoter Score, a quantitative and qualitative measurement of how likely a product or service will be recommended to others. Customer acquisition cost is another metric that determines how much it costs the business to acquire a new customer and whether it will be profitable.
Customer churn rate measures the percentage of customers who cease using a product or service, while average revenue per user (ARPU) is often used in conjunction with monthly recurring revenue (MRR) to make financial forecasts and determine profit potential.
Key Highlights
Customer Satisfaction Score (CSAT):
CSAT is a metric used to measure customer satisfaction with a product or service.
Customers are typically asked to rate their satisfaction on a scale (e.g., from 1 to 5) in response to a specific question like, “How satisfied are you with our product/service?”
It provides a snapshot of overall customer satisfaction and can be used to identify areas for improvement.
Customer Effort Score (CES):
CES measures the ease with which customers can achieve their goals when interacting with a company, such as resolving an issue or making a purchase.
Customers are asked to rate the level of effort required on a scale (e.g., from very easy to very difficult).
Lower effort scores indicate a more seamless customer experience.
Retention Rate:
Retention rate measures the percentage of customers who continue to use a product or service over a specified period.
It’s a critical metric for subscription-based businesses, as it reflects customer loyalty and the ability to keep customers engaged.
Product Adoption Rate:
Product adoption rate tracks how quickly and extensively customers start using new features or updates within a product.
It helps businesses understand whether customers are embracing enhancements and deriving value from them.
Customer Lifetime Value (CLV) to Customer Acquisition Cost (CAC) Ratio:
This ratio compares the value a customer brings over their lifetime (CLV) to the cost of acquiring that customer (CAC).
A ratio greater than 1 indicates that a business is likely to profit from acquiring new customers over time.
Customer Feedback and Reviews:
Collecting and analyzing customer feedback, reviews, and testimonials can provide valuable qualitative insights into customer satisfaction and product improvement opportunities.
Churn Prediction:
Businesses use predictive analytics to identify customers at risk of churning (canceling their subscriptions or discontinuing use).
This proactive approach allows for targeted retention efforts.
Customer Health Score:
Customer health scores are composite metrics that combine various customer success indicators, such as product usage, support interactions, and feedback, to assess the overall health of customer relationships.
Related Frameworks, Models, or Concepts
Description
When to Apply
Customer Lifetime Value (CLV)
Customer Lifetime Value (CLV) is a metric that represents the total revenue or profit generated by a customer over the entire duration of their relationship with a company. It takes into account factors such as customer acquisition cost, retention rate, and average purchase value to calculate the long-term value of a customer to the organization. By measuring CLV, organizations can identify high-value customers, prioritize retention efforts, and allocate resources effectively to maximize customer profitability.
Consider Customer Lifetime Value (CLV) when seeking to understand the long-term financial impact of acquiring and retaining customers within your organization. Use it to calculate the expected revenue or profit generated by individual customers over their lifetime and prioritize customer acquisition and retention strategies accordingly. Implement CLV as a framework for quantifying the value of customer relationships, optimizing marketing and sales efforts, and driving sustainable growth and profitability within your organization.
Customer Churn Rate
Customer Churn Rate is a metric that measures the percentage of customers who discontinue their relationship with a company over a specific period. It reflects customer attrition or loss and indicates the effectiveness of customer retention efforts. By tracking churn rate, organizations can identify trends, patterns, and factors contributing to customer defection and implement strategies to reduce churn and improve customer retention.
Consider Customer Churn Rate when seeking to measure and monitor customer retention and loyalty within your organization. Use it to calculate the percentage of customers who cancel subscriptions, stop purchasing products, or discontinue using services over a given period. Implement Churn Rate as a framework for identifying at-risk customers, understanding the reasons for churn, and implementing proactive retention strategies to reduce customer defection and improve overall customer lifetime value within your organization.
Net Revenue Retention (NRR)
Net Revenue Retention (NRR) is a metric that measures the net change in revenue from existing customers over a specific period, accounting for factors such as upsells, cross-sells, and churn. It reflects the ability of a company to retain and grow revenue from its existing customer base. By tracking NRR, organizations can assess the health and growth potential of their customer relationships and identify opportunities to increase customer lifetime value and overall revenue.
Consider Net Revenue Retention (NRR) when seeking to measure the effectiveness of revenue retention and expansion efforts within your organization. Use it to calculate the net change in revenue from existing customers, accounting for upgrades, expansions, and churn. Implement NRR as a framework for assessing the health and growth potential of your customer base, identifying opportunities for upselling and cross-selling, and optimizing customer success strategies to drive sustainable revenue growth within your organization.
Customer Satisfaction (CSAT) Score
Customer Satisfaction (CSAT) Score is a metric used to measure customer satisfaction with a product, service, or interaction based on a single survey question or rating scale. Customers are typically asked to rate their satisfaction level on a scale (e.g., 1 to 5 or 1 to 10), and the CSAT score is calculated by averaging the responses. By tracking CSAT scores, organizations can assess overall customer satisfaction levels, identify areas for improvement, and prioritize initiatives to enhance the customer experience.
Consider Customer Satisfaction (CSAT) Score when seeking to measure and monitor customer satisfaction levels within your organization. Use it to collect feedback from customers about their satisfaction with specific products, services, or interactions and calculate an aggregate satisfaction score. Implement CSAT Score as a framework for quantifying customer satisfaction, benchmarking performance, and driving continuous improvement efforts within your organization.
Customer Effort Score (CES)
Customer Effort Score (CES) is a metric used to measure the level of effort required by customers to complete a task, resolve an issue, or achieve a goal when interacting with a company or its products/services. Customers are asked to rate the ease of their experience on a scale (e.g., 1 to 5 or 1 to 7), and the CES score is calculated by averaging the responses. By tracking CES scores, organizations can identify areas of friction, streamline processes, and improve the overall customer experience.
Consider Customer Effort Score (CES) when seeking to measure and reduce the effort required by customers to interact with your organization or use your products/services. Use it to collect feedback from customers about their ease of experience and calculate an aggregate effort score. Implement CES as a framework for identifying pain points, streamlining processes, and enhancing the overall customer experience within your organization.
Renewal Rate
Renewal Rate is a metric that measures the percentage of customers or contracts that renew their subscriptions or agreements with a company over a specific period. It reflects customer loyalty, satisfaction, and perceived value of the product or service. By tracking renewal rates, organizations can assess the health of customer relationships, identify churn risk, and implement strategies to improve customer retention and renewal rates.
Consider Renewal Rate when seeking to measure and monitor customer retention and loyalty within your organization. Use it to calculate the percentage of customers or contracts that renew their subscriptions or agreements over a given period. Implement Renewal Rate as a framework for evaluating the effectiveness of customer success efforts, identifying factors influencing renewal decisions, and implementing strategies to improve customer retention and maximize revenue within your organization.
Expansion Revenue
Expansion Revenue refers to the additional revenue generated from existing customers through upselling, cross-selling, or expansion of product usage or services. It represents the incremental value derived from expanding customer relationships and increasing the lifetime value of customers. By tracking expansion revenue, organizations can identify growth opportunities within their customer base and implement strategies to drive upsell and cross-sell initiatives effectively.
Consider Expansion Revenue when seeking to maximize the value of existing customer relationships and drive revenue growth within your organization. Use it to quantify the additional revenue generated from upselling, cross-selling, or expanding product usage or services among existing customers. Implement Expansion Revenue as a framework for identifying opportunities to increase customer lifetime value, drive incremental revenue, and foster long-term relationships with customers within your organization.
Customer Health Score
Customer Health Score is a composite metric that assesses the overall health and satisfaction of customer relationships based on various factors, such as usage metrics, engagement levels, support interactions, and sentiment analysis. It provides a holistic view of customer well-being and identifies customers at risk of churn or dissatisfaction. By tracking customer health scores, organizations can proactively intervene, address issues, and nurture positive customer experiences.
Consider Customer Health Score when seeking to monitor and manage the overall health and satisfaction of customer relationships within your organization. Use it to aggregate and analyze data from multiple sources to assess the well-being and engagement levels of customers. Implement Customer Health Score as a framework for identifying at-risk customers, prioritizing proactive interventions, and fostering long-term relationships and loyalty within your organization.
Customer Retention Cost
Customer Retention Cost is a metric that measures the expenses incurred by a company to retain existing customers and prevent churn. It includes costs associated with customer support, account management, loyalty programs, and retention initiatives. By calculating customer retention costs, organizations can assess the efficiency and effectiveness of their customer retention efforts and optimize resource allocation to maximize ROI.
Consider Customer Retention Cost when seeking to measure and manage the expenses associated with retaining existing customers within your organization. Use it to calculate the costs incurred for customer support, account management, retention programs, and initiatives aimed at preventing churn. Implement Customer Retention Cost as a framework for evaluating the efficiency and effectiveness of customer retention efforts, optimizing resource allocation, and maximizing ROI on customer success initiatives within your organization.
Customer Referral Rate
Customer Referral Rate is a metric that measures the percentage of customers who refer new customers to a company through word-of-mouth recommendations or advocacy. It reflects customer satisfaction, loyalty, and willingness to promote the brand to others. By tracking referral rates, organizations can assess the effectiveness of their products, services, and customer experiences in generating positive word-of-mouth and acquiring new customers through referrals.
Consider Customer Referral Rate when seeking to measure and monitor customer advocacy and word-of-mouth referrals within your organization. Use it to calculate the percentage of customers who refer new customers to your company through recommendations or advocacy. Implement Customer Referral Rate as a framework for evaluating customer satisfaction, loyalty, and brand advocacy, and leveraging customer referrals as a cost-effective acquisition channel within your organization.
Account-based marketing (ABM) is a strategy where the marketing and sales departments come together to create personalized buying experiences for high-value accounts. Account-based marketing is a business-to-business (B2B) approach in which marketing and sales teams work together to target high-value accounts and turn them into customers.
Ad Ops – also known as Digital Ad Operations – refers to systems and processes that support digital advertisements’ delivery and management. The concept describes any process that helps a marketing team manage, run, or optimize ad campaigns, making them an integrating part of the business operations.
Venture capitalist, Dave McClure, coined the acronym AARRR which is a simplified model that enables to understand what metrics and channels to look at, at each stage for the users’ path toward becoming customers and referrers of a brand.
Affinity marketing involves a partnership between two or more businesses to sell more products. Note that this is a mutually beneficial arrangement where one brand can extend its reach and enhance its credibility in association with the other.
As the name suggests, ambush marketing raises awareness for brands at events in a covert and unexpected fashion. Ambush marketing takes many forms, one common element, the brand advertising their products or services has not paid for the right to do so. Thus, the business doing the ambushing attempts to capitalize on the efforts made by the business sponsoring the event.
Affiliate marketing describes the process whereby an affiliate earns a commission for selling the products of another person or company. Here, the affiliate is simply an individual who is motivated to promote a particular product through incentivization. The business whose product is being promoted will gain in terms of sales and marketing from affiliates.
The bullseye framework is a simple method that enables you to prioritize the marketing channels that will make your company gain traction. The main logic of the bullseye framework is to find the marketing channels that work and prioritize them.
Brand building is the set of activities that help companies to build an identity that can be recognized by its audience. Thus, it works as a mechanism of identification through core values that signal trust and that help build long-term relationships between the brand and its key stakeholders.
According to inbound marketing platform HubSpot, brand dilution occurs “when a company’s brand equity diminishes due to an unsuccessful brand extension, which is a new product the company develops in an industry that they don’t have any market share in.” Brand dilution, therefore, occurs when a brand decreases in value after the company releases a product that does not align with its vision, mission, or skillset.
The brand essence wheel is a templated approach businesses can use to better understand their brand. The brand essence wheel has obvious implications for external brand strategy. However, it is equally important in simplifying brand strategy for employees without a strong marketing background. Although many variations of the brand essence wheel exist, a comprehensive wheel incorporates information from five categories: attributes, benefits, values, personality, brand essence.
The brand equity is the premium that a customer is willing to pay for a product that has all the objective characteristics of existing alternatives, thus, making it different in terms of perception. The premium on seemingly equal products and quality is attributable to its brand equity.
Brand positioning is about creating a mental real estate in the mind of the target market. If successful, brand positioning allows a business to gain a competitive advantage. And it also works as a switching cost in favor of the brand. Consumers recognizing a brand might be less prone to switch to another brand.
Business storytelling is a critical part of developing a business model. Indeed, the way you frame the story of your organization will influence its brand in the long-term. That’s because your brand story is tied to your brand identity, and it enables people to identify with a company.
Content marketing is one of the most powerful commercial activities which focuses on leveraging content production (text, audio, video, or other formats) to attract a targeted audience. Content marketing focuses on building a strong brand, but also to convert part of that targeted audience into potential customers.
One of the first mentions of customer lifetime value was in the 1988 book Database Marketing: Strategy and Implementation written by Robert Shaw and Merlin Stone. Customer lifetime value (CLV) represents the value of a customer to a company over a period of time. It represents a critical business metric, especially for SaaS or recurring revenue-based businesses.
Customer segmentation is a marketing method that divides the customers in sub-groups, that share similar characteristics. Thus, product, marketing and engineering teams can center the strategy from go-to-market to product development and communication around each sub-group. Customer segments can be broken down is several ways, such as demographics, geography, psychographics and more.
Developer marketing encompasses tactics designed to grow awareness and adopt software tools, solutions, and SaaS platforms. Developer marketing has become the standard among software companies with a platform component, where developers can build applications on top of the core software or open software. Therefore, engaging developer communities has become a key element of marketing for many digital businesses.
A digital channel is a marketing channel, part of a distribution strategy, helping an organization to reach its potential customers via electronic means. There are several digital marketing channels, usually divided into organic and paid channels. Some organic channels are SEO, SMO, email marketing. And some paid channels comprise SEM, SMM, and display advertising.
Field marketing is a general term that encompasses face-to-face marketing activities carried out in the field. These activities may include street promotions, conferences, sales, and various forms of experiential marketing. Field marketing, therefore, refers to any marketing activity that is performed in the field.
interaction with a brand until they become a paid customer and beyond.
Funnel marketing is modeled after the marketing funnel, a concept that tells the company how it should market to consumers based on their position in the funnel itself. The notion of a customer embarking on a journey when interacting with a brand was first proposed by Elias St. Elmo Lewis in 1898.
Funnel marketing typically considers three stages of a non-linear marketing funnel. These are top of the funnel (TOFU), middle of the funnel (MOFU), and bottom of the funnel (BOFU). Particular marketing strategies at each stage are adapted to the level of familiarity the consumer has with a brand.
A go-to-market strategy represents how companies market their new products to reach target customers in a scalable and repeatable way. It starts with how new products/services get developed to how these organizations target potential customers (via sales and marketing models) to enable their value proposition to be delivered to create a competitive advantage.
The term “greenwashing” was first coined by environmentalist Jay Westerveld in 1986 at a time when most consumers received their news from television, radio, and print media. Some companies took advantage of limited public access to information by portraying themselves as environmental stewards – even when their actions proved otherwise. Greenwashing is a deceptive marketing practice where a company makes unsubstantiated claims about an environmentally-friendly product or service.
Grassroots marketing involves a brand creating highly targeted content for a particular niche or audience. When an organization engages in grassroots marketing, it focuses on a small group of people with the hope that its marketing message is shared with a progressively larger audience.
Growth marketing is a process of rapid experimentation, which in a way has to be “scientific” by keeping in mind that it is used by startups to grow, quickly. Thus, the “scientific” here is not meant in the academic sense. Growth marketing is expected to unlock growth, quickly and with an often limited budget.
Guerrilla marketing is an advertising strategy that seeks to utilize low-cost and sometimes unconventional tactics that are high impact. First coined by Jay Conrad Levinson in his 1984 book of the same title, guerrilla marketing works best on existing customers who are familiar with a brand or product and its particular characteristics.
Hunger marketing is a marketing strategy focused on manipulating consumer emotions. By bringing products to market with an attractive price point and restricted supply, consumers have a stronger desire to make a purchase.
Integrated marketing communication (IMC) is an approach used by businesses to coordinate and brand their communication strategies. Integrated marketing communication takes separate marketing functions and combines them into one, interconnected approach with a core brand message that is consistent across various channels. These encompass owned, earned, and paid media. Integrated marketing communication has been used to great effect by companies such as Snapchat, Snickers, and Domino’s.
Inbound marketing is a marketing strategy designed to attract customers to a brand with content and experiences that they derive value from. Inbound marketing utilizes blogs, events, SEO, and social media to create brand awareness and attract targeted consumers. By attracting or “drawing in” a targeted audience, inbound marketing differs from outbound marketing which actively pushes a brand onto consumers who may have no interest in what is being offered.
Integrated marketing describes the process of delivering consistent and relevant content to a target audience across all marketing channels. It is a cohesive, unified, and immersive marketing strategy that is cost-effective and relies on brand identity and storytelling to amplify the brand to a wider and wider audience.
The marketing mix is a term to describe the multi-faceted approach to a complete and effective marketing plan. Traditionally, this plan included the four Ps of marketing: price, product, promotion, and place. But the exact makeup of a marketing mix has undergone various changes in response to new technologies and ways of thinking. Additions to the four Ps include physical evidence, people, process, and even politics.
Marketing myopia is the nearsighted focus on selling goods and services at the expense of consumer needs. Marketing myopia was coined by Harvard Business School professor Theodore Levitt in 1960. Originally, Levitt described the concept in the context of organizations in high-growth industries that become complacent in their belief that such industries never fail.
Marketing personas give businesses a general overview of key segments of their target audience and how these segments interact with their brand. Marketing personas are based on the data of an ideal, fictional customer whose characteristics, needs, and motivations are representative of a broader market segment.
Meme marketing is any marketing strategy that uses memes to promote a brand. The term “meme” itself was popularized by author Richard Dawkins over 50 years later in his 1976 book The Selfish Gene. In the book, Dawkins described how ideas evolved and were shared across different cultures. The internet has enabled this exchange to occur at an exponential rate, with the first modern memes emerging in the late 1990s and early 2000s.
Microtargeting is a marketing strategy that utilizes consumer demographic data to identify the interests of a very specific group of individuals. Like most marketing strategies, the goal of microtargeting is to positively influence consumer behavior.
Multichannel marketing executes a marketing strategy across multiple platforms to reach as many consumers as possible. Here, a platform may refer to product packaging, word-of-mouth advertising, mobile apps, email, websites, or promotional events, and all the other channels that can help amplify the brand to reach as many consumers as possible.
Multi-level marketing (MLM), otherwise known as network or referral marketing, is a strategy in which businesses sell their products through person-to-person sales. When consumers join MLM programs, they act as distributors. Distributors make money by selling the product directly to other consumers. They earn a small percentage of sales from those that they recruit to do the same – often referred to as their “downline”.
The Net Promoter Score (NPS) is a measure of the ability of a product or service to attract word-of-mouth advertising. NPS is a crucial part of any marketing strategy since attracting and then retaining customers means they are more likely to recommend a business to others.
Neuromarketing information is collected by measuring brain activity related to specific brain functions using sophisticated and expensive technology such as MRI machines. Some businesses also choose to make inferences of neurological responses by analyzing biometric and heart-rate data.
Neuromarketing is the domain of large companies with similarly large budgets or subsidies. These include Frito-Lay, Google, and The Weather Channel.
Newsjacking as a marketing strategy was popularised by David Meerman Scott in his book Newsjacking: How to Inject Your Ideas into a Breaking News Story and Generate Tons of Media Coverage. Newsjacking describes the practice of aligning a brand with a current event to generate media attention and increase brand exposure.
A microniche is a subset of potential customers within a niche. In the era of dominating digital super-platforms, identifying a microniche can kick off the strategy of digital businesses to prevent competition against large platforms. As the microniche becomes a niche, then a market, scale becomes an option.
We can define pull and push marketing from the perspective of the target audience or customers. In push marketing, as the name suggests, you’re promoting a product so that consumers can see it. In a pull strategy, consumers might look for your product or service drawn by its brand.
Real-time marketing is as exactly as it sounds. It involves in-the-moment marketing to customers across any channel based on how that customer is interacting with the brand.
Relationship marketing involves businesses and their brands forming long-term relationships with customers. The focus of relationship marketing is to increase customer loyalty and engagement through high-quality products and services. It differs from short-term processes focused solely on customer acquisition and individual sales.
Reverse marketing describes any marketing strategy that encourages consumers to seek out a product or company on their own. This approach differs from a traditional marketing strategy where marketers seek out the consumer.
Remarketing involves the creation of personalized and targeted ads for consumers who have already visited a company’s website. The process works in this way: as users visit a brand’s website, they are tagged with cookies that follow the users, and as they land on advertising platforms where retargeting is an option (like social media platforms) they get served ads based on their navigation.
Sensory marketing describes any marketing campaign designed to appeal to the five human senses of touch, taste, smell, sight, and sound. Technologies such as artificial intelligence, virtual reality, and the Internet of Things (IoT) are enabling marketers to design fun, interactive, and immersive sensory marketing brand experiences. Long term, businesses must develop sensory marketing campaigns that are relevant and effective in eCommerce.
Services marketing originated as a separate field of study during the 1980s. Researchers realized that the unique characteristics of services required different marketing strategies to those used in the promotion of physical goods. Services marketing is a specialized branch of marketing that promotes the intangible benefits delivered by a company to create customer value.
Sustainable marketing describes how a business will invest in social and environmental initiatives as part of its marketing strategy. Also known as green marketing, it is often used to counteract public criticism around wastage, misleading advertising, and poor quality or unsafe products.
Word-of-mouth marketing is a marketing strategy skewed toward offering a great experience to existing customers and incentivizing them to share it with other potential customers. That is one of the most effective forms of marketing as it enables a company to gain traction based on existing customers’ referrals. When repeat customers become a key enabler for the brand this is one of the best organic and sustainable growth marketing strategies.
360 marketing is a marketing campaign that utilizes all available mediums, channels, and consumer touchpoints. 360 marketing requires the business to maintain a consistent presence across multiple online and offline channels. This ensures it does not miss potentially lucrative customer segments. By its very nature, 360 marketing describes any number of different marketing strategies. However, a broad and holistic marketing strategy should incorporate a website, SEO, PPC, email marketing, social media, public relations, in-store relations, and traditional forms of advertising such as television.
Gennaro is the creator of FourWeekMBA, which reached about four million business people, comprising C-level executives, investors, analysts, product managers, and aspiring digital entrepreneurs in 2022 alone | He is also Director of Sales for a high-tech scaleup in the AI Industry | In 2012, Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy.
