The Cost of Switching Your Tech Stack: What's Marketing Got to Do with It?

Business.com / Technology / Last Modified: February 22, 2017

The cost of switching to more advanced platforms has become relatively negligible for SMBs. But what does marketing have to do with it?

Historically, technology providers scaled their businesses by creating a very high cost for switching platforms. Changing from one operating system to another was a daunting task for a company with a significant number of computers. Interoperability, the risk of losing information, training users on the new system and incurring substantial downtime was simply too much for many buyers. Today, the cost of switching technology platforms has come down. Way down. Down to the point where many technology companies are struggling to adapt to this new market reality.

Today, digital companies are expected to grow their ad tech stacks, or just tech stacks period in order to keep up with the big data marketing campaigns and management technologies for their business. According to research by the IAB and Winterberry Group, marketers use more than 12 tech toolsets to support data-driven marketing efforts; 9% use more than 31.

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Here's the truth: outside of an increasingly small number of highly specialized applications that are used by large corporations, the cost of switching is negligible today.

Take a look at what's happened in CRM systems with Salesforce.com, and a host of other companies disrupting a few large, legacy providers. Watch what is now happening in IT, HR and other functional application markets as lighter weight, SaaS-based platforms disrupt the status quo.

So, what are incumbents to do? Sit back and watch their increasingly fickle buyers switch out from under them? For many companies, this is a clarion call to rethink their competitive landscape. There is an obvious and connected point that is perhaps even more important. They need to rethink their marketing strategy. 

From Lead Generation to Customer Nurturing

Auto companies spend nearly $.70 of every advertising dollar on current customers. This "installed base" marketing helps them retain customers as the cost of switching out a leased car for a competing brand has dropped precipitously over the last decade.

Today, most business marketers are so fixated on lead generation that they've lost sight of their current customers. Not only are your current customers your best-and least expensive new customer, losing them to a competitor creates a compound problem. If you're not consistently reminding your customers how smart they were to buy from you and how much you value them as a customer, the only voice they hear is your competitor's marketing convincing them to switch. Your competitors are also reminding your customers that the cost of switching today has dropped to zero.  

As a business marketer today, you need to prioritize your current customer as high as you do net new customers. Otherwise you simply can't fill the top of your marketing funnel fast enough to drive new leads and turn them into customers, to outrun the current customers dropping out and switching to other suppliers.

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You also need to go beyond the simple email newsletters and annual user events. These are literally the equivalent of the spouse who dutifully gives their significant other cards on birthdays and their anniversary and takes them to dinner on Valentine's Day once a year. It is just not enough to maintain a strong and valuable relationship.

Here are 4 steps to take to keep your customers onboard:

  1. Review your media and make sure you are balancing your lead generation with current customer marketing budgets. If you don't have a handle on what you spend to nurture and grow current customers versus what you spend on lead generation now is a good time to figure that out. 
  2.  Meet with your customers. Call them, of course. Better yet, go meet with them. Customers remember faces. Tell their stories in your marketing via case studies and interviews. Reference them in your display ads and in your content marketing. 
  3. Set up a referral program. Let your customers know that you'd appreciate their telling their peers about the value of your products and services.  Set up a fun referral program where every referral they make, you will make a donation to a charity. 
  4. Remind them of your innovations. Tell them what you have on your roadmap to make your product better. Share with them your engineering pipeline and when features will get launched. Not only should it excite you, but it will excite your customers that you are making a commitment to improve.

The Customer Marketing Continuum 

This does not mean you should back off on-brand engagement and demand generation marketing to drive new customer acquisition. Quite the opposite. Smart brand engagement, demand generation and retention marketing programs work together as a customer marketing continuum.

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