Why customer retention should be your top priority.
When it comes to B2B marketing, businesses often focus on customer acquisition. After all, you can’t build brand loyalty if you don’t have customers.
But what if you already have a decent customer base?
That’s where customer retention comes in. According to Harvard Business Review, boosting customer retention by just 5% can actually increase your revenue by 25% to 95%. But with our efforts so consumed with converting new leads, it can be easy to lose sight of the fact that marketing to existing customers calls for a separate strategy.
This article shares 8 pointers to help you get started on the right track.
The challenges of marketing to existing customers
Marketing to existing customers comes with its own set of difficulties. According to a study conducted by Gallup, only 29% of B2B customers are fully emotionally and psychologically engaged with the companies they do business with. This means B2B businesses are at risk of losing more than two-thirds (or 71%) of their customer base.
Because of this reason, customer retention should be a key priority. As Forrester aptly puts it:
With the widespread adoption of recurring revenue models, marketing must maintain a focus on existing customers. Leaders should…work together with sales operations and customer success operations to maximize customer lifetime value.
In order for this happen, you need a holistic approach.
8 tips for marketing to existing B2B customers
Evolve your offering
According to Robert W. Palmatier and Shrihari Sridhar’s influential book Marketing Strategy: Based on First Principles and Data Analytics, one fundamental challenge that all companies face is the fact that all customers change—even in B2B contexts.
Sometimes, customers simply grow out of their need for your product; this is something you don’t have control over. But you can, to an extent, adapt to changing market needs and broader macroenvironmental trends by continually evolving your offering.
Doing this will greatly reduce the amount of preventable customer churn in the long term. To offer an example, software firms constantly develop new features in order to stay compatible with their users’ needs.
If you grow alongside your customers, you’ll be able to market to them more effectively.
How to get started
Create a product roadmap that clearly outlines the vision, direction, and progress of your product. Make sure they’re informed by market trajectories, strategic goals, resource constraints—and most importantly—customer feedback.
One effective way to receive customer feedback in a streamlined way is to first pick software tools that allow you to tag and analyse responses from customers (like Intercom), so you can track how their priorities are changing over time and why.
Be sure to also give them the opportunity to submit and vote on feature requests. This will help you understand which product updates will have maximum impact to your organisation.
Continue your market research (and make clear hypotheses)
Most organisations rightfully conduct persona research and competitive analysis before bringing a product to market. However, many of them stop doing it altogether once they’ve gained a sizable customer base. This often leads to indecision and inaction within your organisation—two things that inhibit your company’s ability to strategise efficiently and effectively.
Market research gives you the opportunity to get to know your existing customers better, not just prospective ones. Treat it as an iterative process that can help you prove the hypotheses you have about people who use your product. This will help you make better marketing decisions going forward.
How to get started
If you’re not sure whether your research hypotheses are worth testing, there are ways to check. Firstly, a hypothesis must be testable and quantifiable. Secondly, it must have an independent and dependent variable. Lastly, it should produce valuable clues about your customers—regardless of whether the result is positive or negative.
For example, ‘changing the wording of my newsletter’s CTA from X to Y will reduce confusion and improve the number of webinar sign-ups’ is a sound research hypothesis.
Reevaluate your organisation’s upselling and cross-selling strategies
Because customer retention is so crucial within a B2B context, it’s important that you (and your sales colleagues) continually reassess how your organisation upsells and cross-sells.
You might be tempted to upsell or cross-sell to all of your existing customers, but this can severely backfire. Instead, set aside time to consider their individual needs and how you can help them with their long-term goals.
How to get started
Predictive analytics tools are often very useful tools for cross-selling and upselling, so if you don’t currently use one, you might consider adding it to your martech stack.
By using the past transactional data of existing customers, predictive analytics decide what a particular person is most likely to purchase next—and help you launch highly personalised cross-selling and upselling campaigns.
When you do approach the relevant customers, be very clear on how their decision to upgrade or purchase more products can materially benefit them right now and in the future (in three months’ time, six months’ time, etc.).
Communicate in quantifiable terms. For example, if your product helps companies work more productively, calculate the loaded labour rate against the hours saved.
Have a dedicated content marketing plan for existing customers
Much of your existing marketing content may be aimed at new or prospective customers. However, demonstrating to your existing customers that you haven’t forgotten them is just as (if not more) important. For this reason, you should come up with a dedicated content plan for them as well.
Your existing customers will expect different types and styles of content from you. Instead of pushing them towards a purchase, focus more on thought-provoking content that helps them extract more value from your product. Be sure to maintain a consistent mix of trending and evergreen content. Articles and newsletters that cover topical news within your niche will help your organisation stay top-of-mind; educational whitepapers and eGuides will help you establish your position as a thought leader.
How to get started
Content plans should always be informed by research. Start by brainstorming a list of relevant topics (tools like Semrush’s Topic Research Tool can help). This will give you an initial idea of the types of questions that your existing customers would like you to answer.
Once this is done, delve further into keyword research. This will help you determine content pillars and topic clusters. For instance, if you sell lead generation software, you might want a pillar page dedicated to lead generation with several cluster pages about subtopics like ‘lead generation software common issues’.
Use the true loyalty matrix to understand your customer base
It can be difficult to market to existing customers if you don’t know how stable your customer base is. Some customers are true advocates for your product; others will switch to an alternative if given the chance. These two groups require very different approaches.
A true loyalty matrix can help you visualise this better. If they demonstrate attitudinal loyalty as well as behavioural loyalty, then they are loyal advocates. These customers are the most open to cross-selling and upselling opportunities.
Customers with latent loyalty are those who have positive views toward your organisation but no longer purchase your products. Usually, this means they no longer need you but are willing to recommend you to their network. Therefore, it’s a good idea to check in with them every now and then, as you can still leverage their influence.
Those with spurious loyalty are high-risk customers who require immediate follow-up.
How to get started
Use data from your CRM platform (such as Hubspot) to help you determine which segment a certain customer falls under.
For behavioural loyalty (what existing customers actually do), look for transactional data and purchase habits.
There are many ways to gauge attitudinal loyalty (how existing customers feel about you). The sources of data you can use may include, but are not limited to:
- Net Promoter Scores (NPS)
- Customer Effort Scores (CES)
- Customer satisfaction survey data
- Social media mentions
Develop clear guidelines for customer service
The success of your customer retention efforts depends on how well-established your organisation’s customer service guidelines are. For this reason, marketers must collaborate with customer service agents in order to retain at-risk customers.
According to PwC, positive customer experiences have a direct impact on brand loyalty. Work with your customer service and sales teams—and make sure that your organisation’s brand values can be seen in your agents’ tone of voice, language and canned responses.
How to get started
A big part of developing clear customer service standards has to do with creating specific and measurable goals, then deciding how to achieve them.
If you want to:
- Decrease support ticket volumes: consider creating a knowledge base, so customers can help themselves in the first instance before reaching out to you.
- Decrease average reply times: look at the busiest times for incoming support requests and make sure you have extra staff during those periods.
- Increase your first contact resolution (FCR) rate: create an internal database of tried-and-true replies and canned responses, so customers’ needs are met the first time they reach out for help.
Identify patterns within the customers you do lose
Sometimes you won’t be able to salvage your relationship with a high-risk customer (and that’s okay). But it is crucial to understand why your past customers have churned.
How to get started
Campaign management tools with customer behaviour analytics capabilities can help you identify common patterns within those who have left, so you can reach out to future at-risk customers before it’s too late. But generally, these are the types of ‘red flags’ you should look for:
- Frequency and length of product use: if an existing customer suddenly stops using your product (or uses it for significantly less time), it may be a warning sign that they are about to lapse.
- Number of customer support requests: several requests for help could mean that the customer is struggling to get value from your product.
- Consistent negative feedback: an at-risk customer may express dissatisfaction about your product for a week or so before leaving.
Launch a loyalty programme
Loyalty programmes can boost engagement and give existing customers a reason to continue doing business with you. Because of this, they can be an extremely effective way to reduce your customer churn rate.
Generally speaking, B2B loyalty programmes tend to all share the following four features:
- Tiered incentives: customers are rewarded points for purchases. When they pass certain thresholds, they receive extra incentives.
- Co-marketing and support activities: cooperating with your customers to get mutual brand exposure.
- Referral perks: offering rewards to customers for bringing you leads.
- Transaction-based discounts: this involves giving a discount depending on the transaction value.
The main point to keep in mind when designing a loyalty programme is to keep it simple and easy to understand. If there’s too much fine print, it can overwhelm your customers.
How to get started
Loyalty programmes are only worth it if they have a clear goal (in this case, it’s customer retention). And because of this reason, the first thing you must do is make sure that you have access to the data needed to measure the programme’s effectiveness in the first place.
Most firms usually do this every quarter or year. To calculate your customer retention rate, the formula is: (E-N) / S x 100. You’ll need to know:
- S: The number of customers at the start of the time period
- E: The number of customers left at the end of the time period
- N: The number of new customers gained during the time period
The higher your percentage, the more effective your loyalty programme is.
Marketing to existing B2B customers requires organisations to shift their focus away from winning new people to proving their value—long after the sale has closed. This means adapting to evolving market trends, reassessing your promotional strategies, and gaining an even more in-depth understanding of your customers.
Clearly, this will require close collaboration with other departments in your organisation, such as sales and customer service. Instead of seeing customer retention as an isolated effort, treat it more like a holistic process that involves key internal stakeholders.