7 Modern Marketing ideas to catalyze Higher Customer Retention
You must have heard this quite a few times that 80% sales come from 20% of your existing customers. These are the golden words of B2B marketing (and also B2C). The only difference between these two is that B2B marketing involves a longer sales cycle which in-turn requires much more focus on retaining existing customers. B2C brands also focus on customer retention, but their sales cycles are very short. For example, an eCommerce platform will showcase relevant ads of their products to a lead. This lead, when makes a purchase, is a closed deal. The sales cycle for this lead is now completed. What follows next is tailored email campaigns and social ads so that this customer initiates a sales cycle once again.
But that's not how sales cycle for B2B brands happen. Here they are longer cycles which involves a lot of nurturing before a lead turns into a customer. And when a lead becomes a customer, brands put their best practices forward to delight these customers, urge them to become brand advocates and thereby help in bringing in more qualified leads. The best example for this is the referral programs that brands carry out.
According to a recent B2B CMOs survey, customer retention took the top spot for #1 Strategic focus leaving behind revenue growth. About 87.3% CMOs said that their focus is on customer retention, followed by revenue growth at 86.5%.
Source: Survey by Altify
This is how the modern marketers are now thinking. Instead of calculating the total revenue growth against each new customer, they are focusing more on nurturing and delighting existing customers. In a study by Bain and Company, it was revealed that an improvement of 5% in customer retention rates fuelled 25-95% increase in profits. And it was proved by GrooveHQ when they had a 95% increase in profits with a mere increase of 5% in customer retention rates.
So how do brands retain their existing customers? Let's find out below.
7 B2B customer retention practices for modern marketers
Customer Retention is essential for a B2B brand to create brand loyalty, increase revenue, and also make way for qualified leads. For instance, Brandongaille revealed that 12-15% of the customers who are loyal represent around 55-70% of the sales. Period.
Source: Infographic by Brandongaille
While referral programs are one way how brands are doing this, here are the most voted customer retention practices advocated by modern marketers.
#1. Surprise your customers
We love surprises. We all do.
So does your customers. When you are nurturing your customers, think deeper. What can be of value to them? What can you offer them that will pleasantly surprise them?
You see surprises are sudden. You can send a surprise offer on your customers' birthday or maybe a congratulation offer upon completing a certain milestone while using your product. It can be anything that was not pre-planned.
For instance, Jawbone's idea of sending handwritten notes to its customers is just heartwarming. Their customers know how much the brand values them through this gesture.
Source: Erin Fors’s Twitter
When a brand takes the effort to write a note for every customer manually, it makes a positive impact on the customers' psychology. It facilitates brand loyalty (and also some emotional attachment to that brand). After all, buying decisions has a lot to do with customer emotions. Even scientists agree that surprises (good ones) are good for the brain.
#2. Work on improving customers' trust on your brand
When your friend says "I had a horrible experience with that brand. So I have stopped using it", it is psychological that you will also retreat your steps when it comes to that particular brand. Negative feedback can harm your brand's trust more than you can think off.
So the primary focus for any brand must be on building trust among existing customers. That's the only way you can build brand loyalty. Successful businesses thrive on customer trust. In your business, there are only two people- you and your customer. And a relationship between two people dies if there is no trust. Something like this will follow after one customer has a bad experience.
According to Forbes Insight and EY, marketers should rely on data to build customer trust. You ignore your customers for a split second, and they will switch to your competitor in lesser time than that. Nothing turns off your customer away than lousy experience. What may follow is spreading of bad reviews.
While good reviews spread through mouth-of-word works for a brand, negative reviews seem to spread like fire at double speed! According to Concerto Marketing Group, about 83% of your customers will recommend your brand to others. This means, working on building customer trust is very, very important. If you provide good customer experience, your customers will return that through positive advertising of your brand (and they won't even ask for compensations for that).
#3. Re-engage your customers through marketing automation
Your customers also require nurturing just like your new leads. Whether your customer is new or not, re-engagement campaigns are a must. Using a marketing automation tool to re-engage your customers can be optimal choice because it saves time, helps you monitor and track customer engagement, creates behavior-based drip campaigns, and keep the engagement going across multiple marketing channels like emails, SMS, social media, push notifications, mobile and web.
Marketing automation is not just about automating few emails. The scope of an automation tool expands wider than that. It helps in dynamically segmenting your customers based on their lead scores, behavior, demographics, buyers' stage, and other such factors. Tracking and monitoring customers become easy which also helps in predicting customer behavior.
However, a poor marketing automation strategy may turn things sour for your brand. So, the catch to succeed with a marketing automation tool is to know exactly what you want to achieve and how.
#4. Deliver your promises. Infact, overdeliver.
Promises are like debts. If you are not delivering what you promised your customers, you are ruining your brand reputation single-handedly. A dissatisfied customer can cause more damage than you can comprehend. According to Business.com, a dissatisfied customer will most likely tell another 20 persons about the bad experience he/she had with your brand. That is a nightmare.
So the motto for modern marketers is to "under promise and over deliver." This means you are exceeding your customers' expectations all the time. Because on paper, you are delivering more than you promised, and your customers love you for that. They are overwhelmed and satisfied.
There are many instances when customers become aggressive because a brand does not fulfill their promises. According to a study by Manuela Vieth, unkept promises can provoke a sense of revenge in customers.
#5. Always measure CLV (Customer Lifetime Value)
Customer Lifetime Value is an important KPI that shows the worth of your customers across a specific time span. You spend a lot of resources to convert a lead into a customer. So it is essential for you to know the value this customer is adding to your business. In other words, you can call this as customer equity. Some customers add high value to your business, but they are one-time commitments. Some always come around at some point in time. These repeated customers are your VIP customers.
#6. Listen to your customer complaints and work to resolve them
Your customers may have complaints. That's normal.
You are not listening to them or working to resolve it - that is not normal.
Those customers who are complaining are your most significant assets. They are pointing out the flaws that you may have missed. They are your most trusted assets in improving your product and fine tuning it as much as possible.
That your customers are complaining is a living proof that your customers care too about your brand. They have expectations from you and are simultaneously working with you to help you achieve that (Although not always consciously).
Reports suggest that if you can resolve your customer complaints in their favor, about 70% of these customers will agree to do business with you again. So, pay heed to what they are saying. They are interested in your brand, only if you are willing to work things out in their favor.
For instance, Canva, a design brand, came back immediately after its customer posted a billing issue on Twitter.
#7. Send out educational emails to keep them updated
Customer retention email campaigns are the top voted customer retention strategy. Design emails that are aimed at educating your customers about your product features, new launches, new updates, and subjects that are relevant to them.
Nielsen Norman Group suggests that newsletters are effective when a brand is trying to maintain or grow relationships, even with customers who are not much actively making purchase decisions at the moment.
In the end, teaching sells. For example, the newsletters from marketing guru Jeff Bullas is an example of educating customers.
Educate your existing customers to keep them engaged, aware, and also offering good reasons as to why they should purchase from your brand again and again. If you send them valuable content at the earliest, they will likely choose to stay with you. Send them step-by-step emails, how-to emails, product benefits, product features, and behind-the-scenes clips. Encourage customer loyalty programs, tell them about your brand's goal and culture, and improve the overall customer experience.
Let them feel that they are an integral part of your business.
These are the seven most voted methods. Other practices include personalized communications, ad orchestration, welcoming unbiased customer reviews and testimonials, and live webinars or events.
These strategies have worked for B2B businesses, although none of these will give you results overnight. You'd need to be patient while you implement these strategies and wait for the results to show up.
Don't give up too soon. Stay put.
Author: Ankit Prakash
Bio: Ankit is a technology entrepreneur at Aritic - Full Stack Marketing Automation software platform for digital business at Aritic with Sales CRM, Transactional Mail, and Desk. Ankit also spends a majority of his time reviewing various marketing tools and platforms on his marketing blog- Sprout24. Follow Ankit on Twitter at @ankitpr89