A joint study by BIA/Kelsey and Manta found that, for the first time, small businesses truly grasp the impact their customer base has on their long term business viability. The study surveyed nearly 1,000 small business owners (SBOs) and found they now spend more than half of their time and budget focused on existing customers, recognizing that it can be up to ten times more costly to acquire a new customer. Further, a repeat customer spends 67% more than a new one.

There are nearly 28 million small businesses in America, and they are making a formidable impact on the U.S. economy. Small businesses provide 55% of all jobs and account for 54% of all U.S. sales.

These findings are in stark contrast to previous studies showing that small business owners’ primary focus was on customer acquisition, says the report. A 2012 BIA/Kelsey study found that SBOs focused on customer acquisition vs. retention at a 7-to-1 rate, with more than 37% spending over half of their budget on customer acquisition and only 6% spending more than half of their budget on retention.

According to the recent survey, 61% of SBOs  generate  51%+ of their annual revenue from repeat customers rather than new customers. This is reflected in how SBOs spend their time and money, says the report. 62% of SBOs spend the majority of their annual marketing budget to retain existing customers with less than half going to new customer acquisition.

Similarly, SBOs spend the majority of their time and effort investing in existing customer relationships, with 56% of them spending less than 25% of their time and effort on marketing related to customer acquisition.

The study further supports this new alignment, revealing that channels where SBOs will increase time spent, notably email and Facebook, are those best suited to engaging existing customers.

Existing customers can also be leveraged to gain new customers through digital word-of-mouth, such as customers writing reviews, checking in, and posting stories and photos of their experience with businesses. A loyal existing customer can be a brand champion and an important source of new revenue, especially since it can cost up to ten times more to acquire a new customer than to retain an existing one.

Small businesses clearly understand the economics of their existing customers as the benefits of loyalty marketing are proven with increased customer spending and higher retention, yet few SBOs even have a program in place. According to the study, only 34% of SBOs have a loyalty program, while the majority do not. When asked about the purpose of their customer loyalty program, those who had one answered that they want to “Improve customer relationships” (39%) and “Grow revenue” (36%).

Moreover, says the report, the majority of SBO loyalty programs are offline rather than online, failing to take advantage of technologies that enable seamless implementation and deeper customer insights. Only 46% are in some type of digital form, like an email list, while 31%

are paper-based, and 17% verbal/word-of-mouth or in another form.

The report concludes by noting that customer loyalty can bring big benefits to small businesses:

• Existing customers not only comprise the majority of top line revenue, but can dramatically affect a business’ bottom line. According to the “Loyalty Effect”, a 5% increase in customer retention can lead to a 25% to 100% increase in profit for the company
• Existing customers that have an affinity with a brand are easier to up-sell and cross-sell. They already know and like what a brand does, so there is a measure of trust not afforded to an unknown company
• Repeat customers are more likely to refer their friends and family to a business via word-of-mouth, online reviews, and social sites. Technology has amplified the reach of customers, making it easier to share recommendations about a particular business.

For more about the study, please visit Manta here.

With advancements in digital technology, consumers have the ability to be “tuned in” at all hours of the day. They have access to email, websites, and social media—regardless of their physical location. Ironically, this group of intentionally “tuned in” people can quickly become involuntarily “tuned out” by the sheer volume of digital interactions and their fleeting nature.

So, how do you reach customers in a way that will cut through the digital noise? Adding tactile marketing to your existing digital strategies is a proven strategy to increase the overall effectiveness of your marketing investment. Tactile marketing has higher retention and response rates, with 79 percent of consumers acting on a brand’s direct mail piece immediately, according to a Print in the Mix survey.

When the Gap wanted to add a personalized, memorable component to its expansiveholiday campaign, it turned to San Francisco-based startup Sincerely. Using Sincerely’s Postagram Direct app, consumers could send Facebook photos in the form of a postcard to friends and family. Sincerely founder Matt Brezina said, “Brands can associate themselves with engaging content (photos) by turning it into a permanent memory via a less noisy channel.”

A Seamless Solution to Sending Tactile Marketing

By using an on-demand printing API, you can seamlessly access print fulfillment directly from your marketing automation platform. Clients can manage, track, and report on tactile marketing initiatives in the same way they manage digital campaigns. Sending physical pieces such as direct mail, Every Door Direct Mail (EDDM), postcards, promotional items, and corporate gifts is as easy as sending an email.

Research shows that 67 percent of Americans prefer printed materials to digital, and bringing the conversation offline through tactile marketing creates a stronger bond with customers and prospects than digital outreach alone.

Trigger Tactile Marketing to Add Weight to Digital Campaigns

The response rate for direct mail is 4.4 percent, compared to email’s 0.12 percent. Determining when to trigger tactile marketing to support digital efforts can be made easier by evaluating a number of factors. If you rely on marketing automation to streamline your digital programs, here are a few examples of how to incorporate response-evoking tactile materials.

1. Lead Nurturing: To reach key decision makers and ensure follow-up, trigger the sending of a dimensional piece, such as an iron cross mailer, when lead scores change.
2. Loyalty Marketing: Use a printed piece to remind customers when they are eligible for redeeming award points, or gift them with a piece of swag for their continued business.
3. Lead Management: Know what’s been sent and when prospects and customers receive the marketing so you can follow up in a way that’s personalized and relevant.
4. Event Marketing: Send a personalized postcard to invite prospects to a webinar or roadshow. To reach a broader audience, skip the mailing list, and use EDDM to target consumers on entire carrier routes.
5. Upsell and Cross-Sell: When a customer makes a purchase, trigger direct mail or whitepapers that features things like warranties, complementary products, technical documentation, or surveys.
6. Conversion Optimization: Drive customers back to finish their purchase if they’ve left behind a high-dollar item. iProspect found that 67 percent of online searches are driven by offline messages, with 39 percent completing the purchase.

For marketers, Millennials are the most important generation to come along in the last 100 years, according to a recent Adroit Digital study. This group of young adults is the largest generation by number in US history. Millennials number more than 80 million, a population larger than the Baby Boomers, and it outnumbers Gen X almost 3:1. Millennials came of age in the wake of massive advancements in technology, unparalleled communication access, and media exposure that allowed people to spread information faster to a wider, more diverse audience than in any generation before them.

As Baby Boomers move closer to retirement, they will take with them close to $400 billion in annual spending. Retailers are scrambling to secure the loyalty of the Millennial tech-savvy and fast-paced crowd, which spends $600 billion a year.

By 2030, Millennials will outnumber non-Millennials. In addition to growing up as digital natives, Millennials entered college in the face of the largest recession since the Great Depression. Many of those who completed their college education are accompanied by massive student loan debt, and they also entered college knowing a bleak job market faced them. They also see things differently because they are culturally different. Millennials are the most racially and ethnically diverse American generation ever, with over 20% of the population now identifying as Hispanic and 13% as African American.

When asked about how they think about brands compared to how their parents think about them, and how brands can gain their future loyalty, 64% of Millennials are more brand-loyal or as brand-loyal as their parents. 24% consider themselves to be more brand-loyal than their parents. Rest assured, says the report, this generation demonstrates strong brand loyalty.

To gain insight into how Millennials view brands and their thoughts on brand loyalty, 60% of Millennials said that social advertising has the most influence over them in how they perceive a brand and a brand’s value. Traditional media, outside of TV, fell flat. In the realm of influence, radio, billboards (OOH), and magazines finished last with mobile and online, both display and video, comfortably in the center.

Key findings in the report show that:

• 39% of all respondents think that brands that don’t advertise through mobile channels, smartphones, and tablets are outdated and undesirable.
• 32% of those surveyed said social advertising lends the most credibility to influencing their brand decisions, compared to 35% who indicated TV as the most influential advertising channel.
• 26% of Millennial respondents said social is the most likely channel to introduce a new product that they will consider for trial.
• 77% of the Millennials surveyed said they are evaluating brands on a different set of criteria than their parents. Millennials may be brand-loyal, and many use several of the same products their parents are loyal to, but they’ll be evaluating them against a new yardstick.
• 55% of young shoppers said that a recommendation from a friend is one of the strongest influencers in getting them to try a new brand. 47% consider brand reputation to be almost as important. Product quality ranks fourth at 35%, while price has the most sway at 62%.
• 36% of Millennials believe digital advertising is the most effective method of influencing their brand decisions, with traditional advertising as a standalone showing markedly less influence at 19%.
• 52% of Millennials want brands that are willing to change based on consumer opinion and feedback to maintain future relevance. 44% want to have open dialogue with brands through social channels, and 38% want brands to be more about the consumer and less about the brand.
• 38% of Millennials will switch brands if a company is found to have bad business practices. Outside of financial factors, a business found to have bad business practices is the number one reason that Millennials will switch brands.

• I'm brand loyal and use the same brands as my parents   20%
• I use many of the same brands my parents use, but not all   43%
• I use a few of the same brands as my parents   26%
• I use different brands than my parents   11%

• Millennial men feel they are more brand-loyal than their parents compared to Millennial women, 30% and 17%, respectively.
• As Millennials age, their feeling of brand loyalty compared to their parents drops considerably, with 23% of 18–25 year-olds and 37% of those aged 26–33 indicating they are less brand-loyal than their parents.

• Value/price   62%
• Recommended by friend   55
• Brand reputation   47
• Quality   35
• Brand exposure through social media   29
• Eco-friendly brands   28
• Recommended by parent   25
• Entertaining ad campaigns   23
• Prestige/social perception   20
• Established brands that instill trust   20
• Brand exposure through traditional advertising   19

• 56% of Millennials would change brands when they experience a change in finances, as  consumers have to evaluate their current brands and their associated costs and value
• 41% of Millennials would change brands if their current brand increased in price
• The other top three reasons that Millennials would change brands are a recommendation from a friend, at 38%; if their current brand is found to have bad business practices, at 32%; and if something newer and shinier comes along, at 37%
• Women on average are more likely than men to change brands on several counts: something newer, 45% compared to 35%; a brand found to have bad business practices, 36% compared to 28%; and an eco-friendly competitor, 35% compared to 25%.