What do you do when you want to buy a car? If you are a typical buyer, once you have identified the need, you start searching for various options, visit various auto dealers, do test drives and only after a relatively long process you finally press your purchase button. During his process, the salesmen have to actively assist you understand the various options and spend hours in getting the sales done. Compare this with buying a USB flash drive in an electronics store. It might not take you more than 1 hour in deciding the purchase and the salesmen might not spend a lot of time with you during the process.
The first example (car purchase) comes under high touch marketing. Here the volumes are low and margins tend to be high. Customers require a lot of hand-holding in the process and there is a greater degree of customization involved. In the case of buying a USB flash drive, there is a greater degree of commoditization and there is lesser risk that is associated with the purchase. Low touch means the sales force doesn’t need to actively pursue the customer and the margins tend be slightly lower.
How does high touch marketing differ from low touch marketing?
- High touch marketing involves cultivating more personal relationships as you depend on a few high-value customers rather a large number of low-value customers.
- Since the risks are high in these products, there must be options for free trials and product returns. For instance, a car salesman would let you test drive your car and SaaS applications typically have 30-day trial offers.
- High level of customization and personalization are involved. The marketing team must understand the requirement of each customer and should be able to offer a greater degree of customization in high touch products.
- Lead generation should focus on quality and not quantity. If you are selling a high-end finance data product, you cannot just mass mail everyone in the US. The focus must be on warm and hot leads and not on cold leads.
- Focus on customer service and retention. Since the Customer Acquisition Costs (CAC) are very high in high touch segments, a lot of attention must be paid to retain customers. Repeat purchases and referrals are a very important part of high touch marketing.
- Reduce your costs by using inbound marketing methods. In high touch marketing inbound marketing methods shine even better. By making your blog explain your product in great detail, you can save your salesman’s time when he is on the conference with the customer.