Use Marketing and Customer Loyalty to Your Advantage
Editor’s Note: Sara Melefsky is the Director of Digital Marketing at WayPoint Marketing Communications. This is an edited version of an article originally published under the title “Marketing Strategies to Improve B2B Customer Retention Success.”
It’s safe to say that you want your business to be more profitable. And it’s clear that you need customers if you want to achieve business growth in the coming years. What’s less obvious is the importance of marketing to your existing customers, which is just as important, if not more so, than to potential customers. You know it’s important to keep your existing customers happy, but are you incorporating the best customer retention strategies into your annual marketing plan? Repeat purchases are the lifeblood of all B2B and manufacturing companies. These customers have a closer relationship with your team, and through recommendations and testimonials, they help you acquire new customers and ensure revenue. Don’t be complacent and think that once your team closes a sale, that new customer will stick around for a long time.
When talking about customer retention and the best marketing strategies for your current customers, you need to thoroughly answer these fundamental questions:
What do I mean by customer loyalty? What do I mean by customer acquisition? And why is it different? How can you improve customer loyalty? Let’s explore these concepts and share proven customer retention strategies to improve your business performance.
What is customer loyalty? Simply put, customer loyalty means that customers remain loyal to a company over time. It’s a simple concept, but there’s a lot that goes into it. While customer retention is a measurable activity, it is actually more of a process to get existing customers to continue purchasing your solution and using it to support your customer acquisition strategy.
The difference between customer acquisition and customer retention
Most business people know the difference between customer acquisition and customer retention. They understand the challenges of acquiring new customers, the pain of losing existing customers, and the frustration that comes with limited resources, and find a balance between these two concepts. Calculating customer lifetime value and tracking it over time can help you decide how to balance acquisition and retention.
Marketing typically focuses on customer acquisition rather than customer retention. Because customer acquisition is so accessible, it can sometimes not be that difficult to spend money on it. It’s easy to get complacent and stop focusing on the customers you already have. You think they’re safe and will stay for a long time.
The truth is, unless you take the time to understand why your customers are churn and why they’re not loyal to your company, the wounds that cause customer loyalty will never heal. Once you have a customer retention strategy in place, you can attract customers more effectively and keep them for longer. The best customer retention strategy will help you build lasting relationships with your customers, keep them loyal to your company, and turn them into brand ambassadors. In the world of customer acquisition and retention, it’s not about one or the other, but about what balance and combination is right for your business at the moment. You always need both, but customer retention is especially important because it can be a powerful source of new customer acquisition in the long term and provide the best return on investment.
Why is customer loyalty important?
We’ve said that customer loyalty is a core goal of a company’s long-term success. Here are the main reasons:
Due to sales and marketing costs, it is usually less expensive to retain existing customers than to acquire new ones. In fact, retaining a customer is about 5 to 25 times more costly than acquiring a new customer. Customer acquisition typically requires significant company resources to reach and retain potential customers through various marketing channels. On the other hand, the process of customer retention is usually limited to ongoing customer service and satisfaction strategies, such as relationship building and problem solving.
Loyal customers are usually repeat customers, meaning they are valuable to your bottom line. More loyal customers usually mean higher profit margins. Once you have acquired a customer, it becomes easier to upsell or resell your solution since the contact already has an existing relationship with your team and knows your company well.
Finally, satisfied and loyal customers can become new customers if they recommend you to others in their network.
Now that you understand the importance of customer loyalty to your business, the question becomes how can you improve customer loyalty metrics through marketing in a way that will grow your business?
Here’s how to increase customer loyalty
Before we get into specific customer retention strategies to build your business, I want to focus on two main ideas that are leveraged in all of these strategies:
You have defined your ideal target group and know who the best customers are for your company. We all want to sell our solutions to everyone, but every company has a very limited target audience based on its unique value proposition and solution offering. You’re now ready to generate and use customer feedback to improve your customer retention metrics, resulting in deeper customer relationships, increased trust between you and your customers, and reduced customer attrition (also known as “churn”).
8 Strategies to Improve Customer Loyalty
1. Use relationship- and transaction-oriented research to obtain qualitative and quantitative data
Qualitative and quantitative data should be the basis of all marketing decisions, especially those regarding customer retention strategies. Focusing on quantitative research and augmenting that data with qualitative research will give you a comprehensive understanding of your customers’ overall loyalty to your company.
Example Questions:
Quantitative Question: On a scale of 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 of a broad group of customers to provide a reliable data point or percentage (for example, we know that 96% of our customers would recommend us). You can also use this to assign a Net Promoter Score to each customer, which we’ll discuss in more detail later.
Qualitative questions: Why would you be likely or unlikely to recommend our product/service/company to a friend, colleague or family member? These types of questions should be asked of a smaller group of customers to gain more valuable insights into the reasons behind the decision to stay or go.
Relationship questions, like the example above, measure a customer’s overall experience and insights. Doing this regularly can help you track loyalty and identify potential retention risks.
Transactional questions explore your customer’s experience at different stages of the buying cycle. These types of questions will reveal issues your customers are having with your company. Is your onboarding process frustrating? Are your technical or customer service teams slow to respond? Are there challenges with your solution? By studying your customers’ responses to these questions across various touchpoints, you can step in and resolve the issue before you lose them.
2. Stay in constant contact with all your customers, especially the difficult ones.
After collecting data from your surveys, you can review your customer list and classify it into three different categories to help you customize and prioritize your communication with each customer.
Customers are classified into the following categories based on their loyalty to you, their Net Promoter Score, determined from the survey results, and their potential risk of leaving you and joining your competition: Promoters: These customers are loyal, enthusiastic and passionate about your company, your products and your support team. They will go above and beyond to promote your brand and recommend you to others, directly impacting your profitability.
Passives: These customers are not enthusiastic about anything and at the same time, they don’t get angry. They don’t promote your work, but they don’t bounce or leave bad reviews either.
Critics: These customers are not happy with your company. Their experience is negative and they are at the highest risk of leaving and spreading negative reviews, reducing profitability. Angry people are twice as likely to tell others about your business as promoters. It’s easy to focus your time on your company’s promoters; they’re fun and encouraging. While you might be thinking, “Let’s save the sinking ship and get rid of the detractors,” don’t overlook the influence of passive customers. These customers don’t care what you do. They probably don’t understand how partnering with you is different from what they can get elsewhere. They don’t see any added value from you to their industry, which makes them just as vulnerable to competitor offers as they are to critics.
The trick with this strategy is finding the right balance, timing and prioritization of your marketing communications and your in-house “solutions” to turn your customers into your advocates while keeping you a satisfied advocate.
3. Close the Loop and Make Internal Improvements
One of the best ways to improve customer retention is to make internal improvements. Once you analyze your survey data and segment your customers, you can identify flaws in your process and prioritize improvements. You want to get your to-do list done quickly and effectively.
As part of this strategy, responding to survey responses lets your customers know that you take their responses seriously and are addressing their pain points. After all, people respond to surveys because they are interested enough in the topic to make improvements. You can’t wait to reward their efforts. You need to act fast. According to a CustomerGauge study, B2B companies that complete customer surveys through communication and improvement see an 8.5% increase in retention. Plus, companies that resolve issues with negative feedback turn 23% of those customers into advocates.
4. Focus on the customer onboarding process
It’s easy to forget that the customer journey goes beyond the sale. It continues with the onboarding process. Onboarding gives the customer their first glimpse of what to expect from your internal team, including customer service, engineering or technical support, and account management. If you’re a B2B or manufacturing company, a formal onboarding process should be the norm.
This process should educate and familiarize the customer with all of your solutions from your internal and key team members. The various onboarding materials can include video tutorials, welcome emails, training guides, calls or meetings with your team, templates, etc. Use the opportunity to personalize the onboarding process and set a high standard of support to earn bonus points from new customers.
5. Build communities for your industry and customers
Building communities may seem very B2C or “consumer-centric”, but communities within your industry can be important for customer loyalty. They serve as a platform for customers and thought leaders to interact and provide support through the exchange of valuable knowledge. These communities are a source of free and valuable content for everyone who joins them. They are a great place to connect with existing customers while keeping potential customers top of mind in a less formal atmosphere. If the community is hosted and branded by you, you can introduce your products or services to a larger audience without having to push or pressure your sales team.
These communities are also a great place to hear from and gather information from your customers and other industry experts. Communities can not only improve customer loyalty, but also open your eyes to opportunities to expand your product or service solutions.
6. Don’t be afraid to surprise your customers
Surprising your customers from time to time is a great way to build a stronger bond with your company. Surprise them from time to time with a small “thinking of you” gift, a birthday present, a business anniversary, a personal milestone, or even the introduction of a new solution that benefits your company. The more personal the interaction, the stronger the customer’s emotional connection with you. He will want to apply for you because he knows you care and put in the extra effort.
7. Continuously improve your customer support process
Even if your customer support process seems solid now, there is always room for improvement. Technology adapts, and the people who interact with your customer support team are consumers, so they think and act like consumers. They expect customer support to evolve with technology and consumer behavior. B2B customers expect instant solutions to their problems and convenient access to your support team. You need to give your in-house team open access to the entire sales process and documentation, customer information, incoming communications, and the latest technology (live chat, email support, recorded call options, customer relationship management programs, and tools for follow-ups). You should also provide your customer support team with a wide range of training materials that can be distributed to your customers immediately. 8. Stay innovative and bring new solutions to market.
After closing sales with new customers, offering great solutions, improving customer support, and conducting regular surveys, the last thing we recommend you do is build a solutions portfolio. Your solutions should constantly evolve to reflect customer feedback and demonstrate that you are thinking about your customers and their ever-changing needs. It will continue to be built on a foundation of relationships that drive trust, care, and ultimately customer loyalty. This will also help you stand out from your competitors. If you can always offer the best solution on the market, your customers are less likely to churn.
6 Proven Ways for Customer Loyalty
To support the strategies outlined above, here are some helpful tips and best practices to ensure your customer retention efforts don’t go to waste:
Always uphold your company values. These should be embedded in your brand and communicated to your team regularly so that everyone supports your vision and mission.
Don’t just sell your solution, educate the industry. No one likes to be sold to, and no one likes a hard sell approach. Investing in your industry and educating others through your knowledge and insights will help you build trust with those who will listen to what you have to say.
Communicate and be honest with your customers. When you are transparent with your customers, they learn what to expect from you and will trust you more.
Offer effective and unique products and services. If customers realize they missed out on something better after over-promising during the sales process, they are more likely to churn. Always strive to be the best in your field.
Apologize when you make a mistake. No matter how hard we try, we are all human and make mistakes. Depending on how you handle it, you may lose customers when mistakes happen.
Thank your customers. Taking the time to thank your customers outside of email campaigns or the closing of a sale is just as important as apologizing for mistakes. A personal thank you goes a long way in building a company that people are loyal to, cherish, and remember.
