Marketing Strategies to Improve B2B Customer Retention Success
Learn How to Use Marketing and Customer Retention to Your Advantage
It’s safe to say that you are in business to grow your business’ profitability. It’s also obvious that you need customers if you want to see business growth for years to come. What’s not so obvious is the importance of marketing to current customers as much, if not more than, prospective customers. We know that keeping existing customers happy is important, but do we build the best customer retention strategies into our annual marketing plan?
Repeat sales are the lifeline to any B2B and manufacturing business. These customers have deeper relationships with your team, help you acquire new customers through referrals and testimonials and they protect your bottom line. You can’t become complacent and assume that once your team closes the sale, the new customer is going to be with you for a long time.
Discussing customer retention and the best marketing strategies for your current customer means that we need to provide thorough answers to these basic questions:
What does customer retention mean?
What does customer acquisition mean and why is it different?
How can you improve customer retention?
Let’s explore these concepts and share proven customer retention strategies so you can improve business performance.
What is Customer Retention?
Simply put, customer retention is keeping customers around for the long haul. However, though a simple concept, there is a lot that goes into it. Even though customer retention is a measurable activity, it really is more of a process of engaging your existing customers to continue purchasing your solutions and using them to support your customer acquisition strategies.
Customer Acquisition vs Retention
Most business people understand the differences between customer acquisition and customer retention. They understand the challenges of acquiring new customers, the pain of losing existing customers and the frustrations associated with having limited resources and striking a balance between these two concepts. Calculating the customer lifetime value (CLV) and tracking it over time will help you decide how to balance acquisition and retention.
Typically, in marketing, people tend to focus on customer acquisition rather than customer retention. That’s because customer acquisition is familiar and sometimes less challenging to spend money on. It’s easy to become complacent and not focus on the customers you already have—thinking they are secured and will be with you for a long time.
But the truth is, if a customer leaves and you don’t take the time to understand why they are not being loyal to your business, you won’t ever fix the wound causing your customer retention to bleed. Once you fix your customer retention strategies, you will be able to more effectively acquire customers and keep them longer. The best customer retention strategies help you create lasting relationships with customers, keep them loyal to you and convert them into brand ambassadors.
When it comes to the worlds of customer acquisition and customer retention, it’s less about one or the other, and more about what balance and combination is right for YOUR business right now. You will always need both, but customer retention is set apart because, over time, it can be a powerful source of acquiring customers and give you the strongest return on investment (ROI).
Importance of Customer Retention
We mentioned that customer retention is a core goal to a business’ long-term success. The main reasons include:
It’s typically less expensive to retain existing customers than acquiring new customers because of the sales and marketing costs involved. In fact, retaining customers is approximately 5-25 times less expensive than securing a new one. Customer acquisition usually involves a significant portion of business resources to reach and engage prospects through a variety of marketing channels. On the other hand, the process of customer retention is usually limited to ongoing customer service and satisfaction tactics—such as relationship building and problem solving.
Loyal customers tend to be repeat customers, meaning they are valuable to your bottom line. Typically, the more loyal customers you have, the better your profit margins.
Once you have acquired customers, it’s easier to upsell or cross-sell your solutions because your contacts already have an existing relationship with your team and familiarity with your business.
And finally, satisfied and loyal customers can lead to new customers when they refer you to others in their network.
Now that we see the importance of customer retention to businesses, how can you improve your customer retention metrics through marketing in ways that will grow your business?
How to Increase Customer Retention
Before we drill down into the specific customer retention strategies that will build your business, we want to highlight the two main ideas that all these tactics will leverage:
You have defined your ideal target audience and know the best customer for your business. As much as we all want to sell our solutions to everyone, there is a very narrow audience for each business based on your unique value proposition and solution offering.
You are willing to create and leverage customer feedback as part of the process to improve customer retention metrics. The result will be deeper customer relationships, more trust between you and your customers and reduced customer turnover (also known as “churn”).
8 Proven B2B Customer Retention Strategies:
1: Use Relationship and Transactional-Focused Surveys to Provide Qualitative and Quantitative Data
In a previous article we told you qualitative and quantitative data should be the foundation for all marketing decisions—especially for decisions regarding your customer retention strategies.
By focusing on quantitative research, and then building on that data through qualitative research, you will have a thorough understanding of your customer’s overall loyalty to your company. Examples of these questions:
Quantitative Question: On a scale from 0 to 10, how likely are you to recommend our product/service/company to a friend, colleague, or family member?
This type of question can be asked to your broad group of customers to give you reliable data points or percentages (i.e., we know 96% of our customers will refer us). It also allows you to assign a net promoter score (NPS) to each customer. We will discuss this more later.
Qualitative Question: Why would, or why would you NOT, recommend our product/service/company to a friend, colleague, or family member?
This type of question should be asked to a smaller group of customers to give you more valuable insights into the reasoning behind their decisions to stay or leave.
Relationship questions, like the examples outlined above, gauge your customers’ overall experience and insight. If done regularly, you can track loyalty and identify potential retention risks.
Transactional questions examine your customers’ experiences at different stages of the buying cycle with you. This type of question will reveal when customers are experiencing pain points with your business. Is the onboarding process frustrating? Is your technical or customer service team slow to react? Are there challenges with your solutions? Studying customer responses to questions about these various touchpoints will help you step in and fix problems before you lose customers.
2: Regularly Follow Up with All Your Customers, Especially the Challenging Ones
Once you have collected the data from your surveys, you can review your customer list and organize them into three different categories (see below) and customize and prioritize communications to each. Customers are sorted into the following categories based on their loyalty to you, their net promoter score (NPS) that is attained from their survey results and their potential risk of leaving you for your competition.
Promoters: These customers are loyal, enthusiastic and passionate about your overall business, products and support team. They will go out of their way to promote your brand and refer you to other businesses. And they have a direct impact on your profitability.
Passivists: These customers aren’t enthusiastic about anything, and at the same time, aren’t upset either. They aren’t promoting your work, but they aren’t jumping ship or leaving bad reviews.
Detractors: These customers are somehow not happy with your business. Their experiences are negative, and they are the highest risk for leaving and spreading negative reviews—they detract from your profitability. People that are upset are twice as likely to tell others about your business than promoters.
It’s easy to focus time on your company promoters. They are fun and encouraging. And, you may think, “save the sinking ship and fix the detractors.” But don’t overlook the impact of your passive customers. These customers are indifferent about what you do. They likely don’t see how their partnership with you is any different from what they could get elsewhere. They don’t see you as a value-add to their line of work, making them just as susceptible to competitor bids as detractors.
The trick with this strategy is to strike the right balance, timing and prioritization with your marketing communications and internal “fixes” in ways that move customers toward being your promoters, while keeping promoters happy still.
3. Close the Loop and Make Internal Improvements
One of the best ways to improve customer retention is to make internal improvements. When you have your survey data analyzed and your customers sorted, you will be able to see the flaws in your operations and prioritize improvements. You will want to quickly and effectively act on your to-do list.
Part of this strategy means acting upon the survey responses, so customers know you are taking their answers seriously and addressing their pain points. At the end of the day, people respond to surveys because they care enough to help you improve. You can’t wait to act on their efforts. You need to act quickly. A study by CustomerGauge shows that B2B companies that close the loop on customer surveys through communication and improvement will increase retention rates by 8.5%. Furthermore, businesses that solve pain points within their negative feedback convert 23% of those customers into promoters.
4. Focus on Customer Onboarding Processes
Sometimes it’s easy to forget that a customer’s journey goes beyond the point of sale. It continues into an onboarding process. Onboarding offers a first impression of what the customer can expect to experience from your internal teams—customer service, engineering or technical support and account management. For B2B or manufacturing companies, it should be standard practice to have a formal onboarding process.
This process should educate and familiarize customers about all the solutions within your organization and their key team members. Various onboarding materials can include video tutorials, welcome emails, educational guides, phone calls or meetings with their team, templates, etc. You will earn bonus points with new customers with you leave opportunities to personalize the onboarding process—setting a high standard of care.
5. Build a Community for Your Industry and Customers
Building a community might seem very B2C or “consumer focused.” But a community within your industry can be critically important to customer retention. They serve as a platform for customers and thought leaders to interact and provide a support by sharing valuable knowledge. These communities are a source of free and valuable content for anyone that is part of it. It’s a great place to engage with existing customers in a less formal setting, while also staying top-of-mind among potential customers. And when the community is hosted and branded by you, you can push your products and services to a greater audience without a hard sell or added pressure on your sales team.
These communities are also a great place to listen and collect information from your customers and other industry professionals. Aside from improving customer retention, the communities might open your eyes to opportunities for you to expand your products and service solutions.
6. Don’t Be Afraid to Surprise Your Customers
Surprising customers from time to time is a great way to create a stronger bond to your business. Occasionally surprise them with small “thinking of you” gifts, birthday presents, business anniversaries, personal milestone moments or even when you introduce new solutions that benefit their business. The more personal the interaction, the more your customer will be emotionally connected to you. They will want to promote you because they know you care and go out of your way.
7. Continually Improve Customer Support Processes
Even if your customer support processes seem solid now, there is always room for improvement. Technologies adjust, and because the people interacting with your customer support team are consumers, they think and act like consumers—expecting customer support to evolve with technologies and consumer behaviors. Because B2B customers think like consumers, they expect immediate resolutions to their problems and convenient access to your support team. You will need to ensure that your internal team has open access to the entire sales process and documents, customer information, the communications they receive and the latest technologies—live chats, email support, recorded call options, customer relationship management (CRM) programs, follow-up survey tools, etc. You should also arm your customer support team with a wide assortment of educational materials that they can quickly pass along to your customers.
8. Continually Innovate and Release New Solutions
Once you have closed a sale with a new customer, delivered excellent solutions, improved customer support and collected regular surveys, one of the last steps we recommend is to build your solutions portfolio. Your solutions should always evolve to meet the feedback from your customers, showing you care about your customers and their ever-changing needs. It continues to build on a foundation of trust, care and relationships that ultimately build customer retention. This also helps you stand out from your competition. Customers are less likely to leave if you continually have the best solutions on the market.
Top 6 Customer Retention Best Practices
To help support the strategies we outlined above, here are some helpful tips and proven best practices that will ensure your customer retention efforts are not in vain:
Always stand by your company values. These should be outlined in your brand and regularly communicated to your team so that everyone supports your vision and mission.
Don’t just sell your solutions, educate your industry. No one likes being sold to and no one likes hard selling. By investing in your industry and educating others through your knowledge and insight, you build trust with those listening.
You can never over communicate with your customers. By being transparent with your customers, they will learn what to expect from you and trust you more.
Have products and services that are great and unique. If you over-promise during the sales process, leaving customers to realize they missed out on something better, they will likely leave. Always strive to be the best in your niche area of business.
Apologize when you make mistakes. As hard as we try, we are all human and humans make mistakes. Mistakes can put you at risk of losing customers—depending on how you handle it.
Thank your customers. Taking time to say thank you to your customers—outside of an email campaign or closing of a sale—is just as important as apologizing for mistakes. A personal thank you goes a long way toward building a business that people will be loyal to, value and remember.
Keep Your Best Customers Around for a Long Time
Before any business can improve customer retention, slow the rate at which customers leave and reduce the costs to acquire customers, they must first understand the results of these important customer retention metrics. A business that understands these metrics and the implications on their business will have an easier time aligning marketing, sales and customer services programs with its overall business strategy.
Make sure you build customer feedback into your operations. Listening to your customers will help you create a richer customer experience, lead to happier customers and make your business more stable for years to come.
The WayPoint crew has partners experienced in collecting and analyzing data for B2B and manufacturing businesses. We are able use this data to align marketing and communications programs with your overall strategy in ways that provide the best results and grow your bottom line. Contact us and we will help show you the way to impactful customer retention strategies.
Frequently Asked Questions about Customer Retention
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Customer retention refers to the rate at which you can keep your customers for an extended period of time. This is a process of engaging your existing customers to continue purchasing your solutions.
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Customer retention is important to businesses because retaining customers is more cost effective that acquiring new customers.
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Use relationship and transactional-focused surveys to provide qualitative and quantitative data
Follow up with all your customers regularly, and in person
Close the loop and make internal improvements
Focus on customer onboarding processes
Build a community for your industry and customers
Occasionally surprise your customers
Continually improve customer support processes
Innovate to keep updating or releasing new solutions
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Always stand by your company’s values
Don’t just sell your solutions, educate your industry
You can never over communicate with your customers
Provide products and services that are great and unique
Apologize when you make mistakes
Thank your customers
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A CRM can improve customer retention by:
Collecting data on customer interactions, tracking expenses associated with customers and organizing communications between your team and the customer.
Storing information that you can use for multiple purposes within your business, tracking proposals against invoices and managing your sales funnel so you know everything happening with a customer at any given point in time.
Enabling personalized communications through contact merge features—automatically populating communications with name, contact information, sales representative information and even invoicing, product/services they purchase and more.