Focusing on Customer Loyalty & Retention
It’s the age of the customer. Businesses are talking about becoming more “customer-centric”, “customer-first”, “purpose-driven”, “focused on customer experience”, etc. There is no shortage of buzzwords surrounding the importance of the customer in today’s marketplace.
In a recent post about the “B” word, I used a song I’m quite fond of to kick-off a discussion about the meaning of a brand and what it should be for B2B companies. In keeping with this trend, I want to kick-off this post by using another favorite song of mine from a little band called, Tom Petty and The Heartbreakers.
“I Need to Know”
I think this song truly captures our customer’s demand for exceptional customer service. The blistering single is all about empowerment. (What customer today doesn’t want to be empowered?) The song’s protagonist has heard rumors that his romantic partner may be leaving him, and, well he wants answers. He needs to know whether the rumors are true or not.
Today, it’s crucial for a B2B business to worry if their customers are going to leave them for a better offer or due to a bad experience. In fact it’s so crucial, customer retention beat out revenue growth as the #1 strategic focus based on a survey of B2B CMOs.
Smart Right?
It’s smart of Sales and Marketing to want to build and retain a loyal customer following. Most of us have heard of this statistic, ”It costs a business 5-25x more to acquire a new customer than it does to sell to an existing one.” However, have you heard of the study that found, “A 5% improvement in customer retention rates can result in a 25% to 95% increase in profit?”
But B2B companies still aren’t investing in retention as much as they could be.
The worst thing a business can hear is, “Don’t Come Around Here No More” (another great Tom Petty song). But that’s exactly what will happen if your business fails to provide exceptional customer service.
So, don’t back down once the contract has been signed. You want your customers to be happy with you and your brand from their first touchpoint to infinity and beyond.
To help you create a plan to improve customer retention, we suggest you follow some of these best practices.
1. Excpetional account management
Superb account management = customer loyalty
In a saturated market, being the best in ensuring customer happiness will set you apart from the rest. In many cases, the best performing product in a niche isn’t the best product on all fronts. Often, though, they are the most customer-centric. They are the ones who look to solve their customers’ problems first before working on “innovative” bells and whistles in their offerings.
From on-boarding until the customer gets the full hang of your product, you should deliver the best customer service you can. Constantly review and assess your customer success program–including your product.
1:1 communication, personalization and educating your new customer reassures them they made the right decision in choosing your product/service.
Example: IBM is one of America’s largest multinational companies, and it can’t be this without exceptional account management and customer retention. IBM launched the hybrid design-engineering approach called IBM Design Thinking that helps their users carry out their business objectives better and faster. 100+ product teams are using it to grow revenue by double digits.
2. Show them the ropes
In-person events or digital tactics are great ways to promote customer loyalty, introduce new product features, showcase success stories or case studies, and invite feedback.
Events are ideal for products that are embedded in the customer’s daily processes. This is an opportunity to engage with customers directly and gather data for future improvements.
Digital tactics are another form of engagement that can be equally useful to the customer and the business. A customer’s journey shouldn’t end at the purchase stage, but rather extend well beyond it. Using tools like marketing automation you can deliver helpful tips, gather insightful customer feedback, and provide personalized suggestions for adjacent products that will enhance their workflow.
Digital tactics can also be used to continuously educate the customer through content marketing. The more educated your customers are about your product, the quicker and better they can advocate for your brand.
3. Hyper-personalized service
This is another example of how to prove a customer is important to you. Tailor the content for them and give them the white glove service they deserve.
While all post-sales customer engagement should be personalized, strategically focusing on high-value customers that add the most to your bottom line, and have the propensity to refer leads should be a top priority. Personalized service to the kernel level should be provided to these customers.
The best way to approach this is by introducing account based marketing that extends after the closed deal.
Account-based marketing (ABM) is about focusing your campaigns on specific prospects that you single out ahead of time. It’s becoming a more prevalent tactic as marketers align their efforts with revenue, and especially recurring revenue (i.e., contracts). Since ABM requires narrow focus and a unique approach for each account, it’s a great example of personalized B2B marketing.
Think about incorporating exclusivity into your ABM practices. Exclusive access to something of value in limited supply plays to a customer’s emotions as well. Providing access to new products, special promotions and benefits is effective for customers who value exclusivity.
Get to know your customers better. Offer a bespoke service that not only adds value to the customer, but provides you with valuable feedback and deeper insight into their business processes.
4. Do something unexpected
Who doesn’t love a surprise gift? Distinct moments where you delight, surprise and wow your customers are what drives customer loyalty. Surprising them with pleasant benefits and rewards that are not advertised and are completely unexpected drive positive customer behavior.
Like we’ve said before, in B2B, emotions play a huge role. Even during the sales process, buyers who feel they are putting themselves or their company at great risk are less likely to buy. When they’re are repeat customers, the same applies. You need to be stellar in delivering a promise and be over-the-top with your service.
Deciding what type of gift might require sitting with your sales team, finance or customer service team to figure out the right fit and best time for delivery. You can’t give away the farm, but usually there are a couple of nice things you can afford to do.
5. Pay attention to complaints
For every complaint you receive there are 26 other customers who had the same experience and just didn’t say anything.
Don’t ignore or dismiss complaints. They are precious information for Sales, Product Management and Marketing. Studies show that if you respond well to an angry customer, you can turn them into a five star advocate.
6. Win them back
Research shows you have a 20-40% chance of getting a former customer back, if you try at all. Compare that to your chances of selling to a new prospect, which are only 5-20%.
Not even trying to win back a customer has a huge impact on potential revenue. And given the statistic above, you’ve got a pretty good shot of getting them back.
So crunch the numbers… What would it cost to set up a modest win-back program that only did half as well as the statistic earning 10% of your old customers back?
Would that pay for your winback campaign?
Conclusion
Today, the smart money in marketing is prioritizing customer retention first.
Driving customer loyalty in B2B is all about communicating smartly and efficiently with your customers. You should make sure your communication is personalized, actually listen to what your customers have to say and don’t let customers feel immediate negativity when you contact them. Also it’s important to remember this is business and maintaining strong and active relationships with decision makers is crucial. Keeping open and honest lines of communication with your customers can not only increase their loyalty, but will also turn them into customers who are happy, referenceable and actively invested in the success of your business.