Marketers often suppress advertising to their existing customers, assuming they are “loyal” and that ad budget is better spent acquiring new users. This common practice, however, might be a significant missed opportunity. The Movable Middles Growth Framework (MMGF) challenges this conventional wisdom, revealing that even your best customers are likely buying from competitors and can be swayed by strategic advertising, offering substantial untapped potential for retention and increased share of wallet….
The MMGF defines the “Movable Middle” by a consumer’s probability of choice for a brand, not just their buying frequency. What’s startling is that analysis often reveals that a significant portion of “heavy” and “moderate” brand buyers actually fall into the Movable Middle segment. This means that despite their current purchases, they still have a 20-80% probability of choosing your brand on a given purchase, indicating they are also buying from your competitors.
This insight carries profound implications for your customer retention and growth strategies:
- Untapped Potential in Existing Customers: The “general rule” is that a large majority of your customers are buying more from your competitors than from you. This means they are paying attention to your advertising and are highly responsive, with the potential to buy twice as much from you. Advertising to these “Movable Middle” customers can significantly increase their value and loyalty.
- Beyond Suppression Lists: If your “best customers” deliver a share of wallet between 20-80%, you are “leaking business that advertising can help you to retain”. MMGF encourages including these valuable customer segments in your ad targeting, rather than suppressing them.
- Synergistic Marketing: Marketing tactics work synergistically. Email alone may not convert every customer for a subsequent purchase. A combination of email and paid advertising, guided by MMGF, can identify customers for whom this multi-channel approach is most efficient and effective, quantifying the incremental ROI.
- New Customer Acquisition Too: While MMGF includes current customers, it’s designed to leverage audiences that also include prospects who “look like” your existing customers. As a result, targeting the Movable Middle is proven to outperform reach planning at bringing in new customers as well. This dual benefit makes it a powerful strategy for both retention and acquisition.
By understanding that customer loyalty isn’t static and that strategic advertising can influence even your existing customers, MMGF provides a powerful framework to maximize value from your entire audience base, driving both retention and new growth.
Key Takeaways:
- Many “loyal” customers are actually in the “Movable Middle,” buying from competitors.
- Advertising to these customers can significantly increase retention and share of wallet.
- Movable Middles Growth Framework helps identify and target existing customers for maximum incremental value, alongside new prospects.
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