Research indicates it costs between five and eight times more to acquire a new customer than it does to keep an existing one. A key issue for many businesses is how to keep existing customers happy and onboard.
Levels of service have a major impact on customer retention but less obvious is the impact of ongoing communication. Research from Peppers and Rogers group shows that over 60% of existing customers’ state they move suppliers because they either do not feel valued or their supplier does not communicate with them regularly.
Kevin McKeown’s post reviews the research available on the subject. In summary, increasing customer retention by only 10% can have a major impact on business turnover and profitability. Communicating regularly with customers aids retention but it also increases credibility and engagement. Any supplier able to stay ‘ front of mind’ with customers is likely to increase their chances of securing new orders. The challenge is how to regularly communicate effectively with existing customers.
Customer Retention Challenges For Sales
In B2B markets the traditional approach has relied on the sales force to reach out to their customer base. Unfortunately, there are several problems with this approach including:
- Competing priorities.
- Customer resistance.
- The costs involved.
People buy from people and the power of personal relationships should never be discounted. With salespeople incentivised to bring in new customers their time to service existing customers is limited.
In many B2B market sectors, key customer personnel are less open to potential supplier visits than they once were. They too have competing priorities and high demands on their available time. With the mass of information available online they are likely to seek out the information they need long before engaging with a supplier.
While relationships are important the costs involved in meeting a customer can be significant. If that visit is only to maintain a relationship or deliver information then it is important to evaluate if that cost can be justified.
A better approach can be to deliver valuable and engaging information without the direct involvement of sales. Freed from information servicing tasks sales can focus on key relationships and opportunities.
The challenge is to decide what to communicate and how it will be delivered. Inbound (content) marketing requires a specific skill set.
Assuming an appropriate CRM system is in place contacts can be segmented according to their place in the decision-making team. Different sets of content may then be delivered to different groups depending on their information needs. The sales team can have a crucial role in both helping to build a content plan and the contact segmentation process.
Most businesses will employ key people with a valuable view on markets, products or services. Of course, a marketing person could write an adequate post but a post written by an expert could delve much deeper into a subject. This would be of significantly higher value to customers.
Webinars, seminars and in-person events can also be excellent methods to deliver information to the existing customer base. A 2014 survey from Softwareadvice.com found trade shows and in-person events ranked as a key driver of high-quality sales leads in B2B markets. If existing customers sign up for a webinar/seminar or attend a show then that is a great place to start. The key is generating quality feedback on the subjects existing customers would like to be covered during these events.
The final and most important element of the keeping existing customer mix is generating and acting upon customer feedback. That feedback may be in response to an issue or it may come indirectly via the sales force. Whatever the source it is crucial it is acted upon as a matter of urgency.
Given the potential lifetime value of an existing customer and the resources required to replace them, there is no excuse for ignoring feedback. Of course, customers can be difficult. Of course, their complaint, or feedback may be unjustified. Deal with it and move on.
Every effort should be made to keep existing customers and extract more from those customers. Both high levels of service and ongoing communication are key.
Simply communicating is not enough. It is important to employ the best content marketing practice to deliver information that is both useful and engaging. Decide exactly what information is of use to customers before starting the process.