Retention marketing focuses on strategies and programs designed to retain your existing customers and optimize lifetime customer value. In my previous post, B2B Retention Marketing: The First Thing You Must Do, I discussed why retention marketing is worth doing and where to begin. Now let’s talk about some strategies B2B marketers can use to keep their existing customers and gain additional revenues throughout the relationship.
Strategies for retaining customers
At a fundamental level retaining your customers boils down to keeping them happy enough to continue doing business with you. Many customers, though of course it varies by industry and product/service, will maintain the status quo because change involves perceived risk of an unknown provider. Changing providers also involves switching costs. Switching costs are actual costs the customer incurs (financial fees for early termination) or personal costs (career risks, time required to research providers and negotiate an agreement) to stop buying your product or service and begin with a new provider.
Create “sticky” customer relationships
To prevent your customers from defecting to competitors who will eventually upset the status quo, B2B marketers should seek to make the customer relationship as “sticky” as possible by increasing switching costs. For example, you might develop longer term contracts that offer better pricing, but with early termination fees. Enterprise software firms create stickiness via the learning curve investment and platform ecosystems that aren’t transferrable. Or, like we did at an industrial equipment company, provide spare parts inventory for manufacturers inside their plants. Customers liked the assurance that they’d have what they needed on a moment’s notice, reducing manufacturing downtime, and we became more “sticky” with the customer helping ensure they always ordered spare parts from us!
Increase switching costs
The more you can integrate and imbed your products and services into your customer’s day-to-day work, the higher the switching costs will be. For example, when I was working for a property damage and restoration firm, we began including a pre-assessment audit, prior to any actual event, to walk the property with the client, document emergency notification procedures and processes, and better understand and address their unique concerns and needs. The audit documentation helped property managers improve and meet emergency planning requirements and their “investment” of time increased switching costs. In most companies, integrating and imbedding services is left to sales teams and account management, but marketing should be involved to help research what customers want and need, and to help develop and market these services to existing customers.
Delight customers to make them advocates and even partners
Ultimately, B2B marketers should find ways to delight their customers because at some point your competitors, changes within the customer’s organization, or something else will upset the status quo. Delighted customers are those who trust your company (every touchpoint and person they interact with), tell others about the value they derive from your product/services, and want to partner with you to gain even more value. Marketers can delight customers by providing valuable content that helps the customer perform their job better or more easily, providing new products and services that meet changing needs, and providing insights and tools to enable sales and account managers to better delight customers.
Ways marketing can delight customers
Customer newsletters, user groups, and key account management are three effective ways to stay close to and delight your customers. A customer newsletter generated by marketing is an easy and on-going way to provide valuable content, share information about how other customers utilize your products/services, and announce new products/services. User groups and key account management are great ways to more closely partner with your customers to better understand their needs, how they use your products/services, get their feedback and ideas for improvements, and build a personal relationship that provides more opportunities for your company to delight by anticipating needs.
B2B companies of all types can easily create online customer communities or virtual user groups via social media, for example a LinkedIn group. A product company might anticipate a need by sending a helpful reminder for service based on hours of use specific to that customer. An account manager for a service company might uncover a customer problem and offer an add-on or new service that provides a solution or connects them with another customer who faced a similar problem.
Delighted customers not only stay longer, they are happy to provide referrals and case studies, and become brand ambassadors – all valuable for gaining new customers.
Optimizing lifetime customer value
In addition to helping retain customers, B2B marketers play a key role in improving the lifetime value (LTV) of a customer, which is the revenues a customer generates throughout their relationship with your company. Common ways to increase LTV include cross-selling and up-selling. Cross-selling involves offers for related or complimentary products or services, whereas up-selling offers are for a higher end or premium version of the same product or service the customer already has.
Anticipating customer needs
Marketers with a keen understanding and data insights can recognize triggers for and ideal customer segments for each type of offer to create effective campaigns via email and other digital marketing techniques. Depending on your industry, product or service, and available customer data, it can be most effective to educate the sales and account management teams to recognize triggers or provide segmented target prospect lists for personalized cross-sell and up-sell offers.
Though marketing automation makes it easier and less time consuming, every B2B marketer should be retaining and nurturing existing customers with helpful and valuable content and offers. On-going personalized email campaigns and newsletters to your customers help ensure regular contact, especially for accounts without an assigned account manager. It is important to make sure you maintain email addresses for multiple contact roles at each customer and then deliver content that fits their role and industry.
I recommend sending at least a quarterly campaign or newsletter (quality over quantity) and paying special attention to unsubscribes, undeliverable and bounced messages.
Unsubscribes and messages that don’t get through provide early warning signs and are worth investigating.
You’ll learn earlier about waning interest, possible movement to another provider, company name changes, location closings, or when a customer contact has left. Passing along this kind of information to sales or account management enables them to reach out proactively to possibly save a defecting customer, learn about corporate changes that could impact customer spend, or introduce themselves to a new contact at the customer – all of which can increase retention and LTV of the customer.
If you don’t have a retention strategy or if your retention strategy needs improving, it’s worth taking time now to think about ways to make your customer relationships “sticky”, to delight customers, increase customer lifetime value, and how your marketing team can play a key role. Does your marketing team have a dedicated retention marketing role? Do you think a dedicated retention marketing role is a best practice? I’d like to hear your thoughts.
If you’re still wondering where to start, read my previous post, B2B Retention Marketing: The First Thing You Must Do.