Given it costs between five and eight times more to acquire a new customer than it does to keep an existing one the 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 perhaps 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 simply 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 but in summary, increasing customer retention by only 10% can have a major impact on business turnover and profitability. Communicating regularly with customers, therefore, aids retention but it can also increase credibility and customer 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.
Challenges For Sales
The traditional approach, in B2B markets, has relied on the sales force to reach out to their customer base but there are several problems with this approach including:
· Competing priorities.
· Customer resistance.
· The costs involved.
Ultimately, people buy from people and the power of personal relationships should never be discounted but with salespeople incentivised to bring in new customers the time available to service the existing customer base can be limited.
In many B2B market sectors buyers, and other members of the customer decision making team, 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 and increasing resistance to push marketing, they are more likely to seek out the information they need long before engaging with a supplier.
While relationships are important the costs associated with driving to and meeting with, a customer can be significant. If that visit is simply to maintain a relationship, or deliver information, when there are no projects or opportunities in the pipeline then it is important to evaluate if that cost can be justified.
A better approach can be to deliver valuable and engaging information to existing customers without the direct involvement of sales. Freed from the general day to day information servicing tasks sales can then focus on their key relationships and progressing opportunities.
The challenge is to decide what to communicate and how it will be delivered. As the target is existing customers it is reasonable to assume that appropriate contact details will be available and permission to communicate will not be refused.
Assuming an appropriate CRM system is in place contacts within the customer base may be segmented according to their role and their place in the order placement 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 who could be persuaded to write something of value each month. Of course, a marketing person could write an adequate post that may be of interest to an existing customer quality department but a post written by the Quality manager could delve much deeper into a subject and would be of significantly higher value.
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 the appropriate promotion of events and generating quality feedback on the subjects existing customers would like to be covered during such events.
The final, and possibly most important, element of the keeping existing customer mix is generating (and acting upon) genuine customer feedback. That feedback may come in directly in response to an issue. It may be solicited directly or it may come indirectly via the sales force. Whatever the source it is crucial it is recognized and acted upon as a matter of urgency.
Given the potential lifetime value of an existing customer and all the time and resources required to replace them if they do leave there is absolutely no excuse for ignoring feedback (or a complaint). Of course, customers can be difficult, of course, their complaint, or feedback may be unjustified, of course, they may be irrational but that comes with the territory. Deal with it and move on.
Keeping existing customers and extracting more from those customers via both high levels of service and ongoing communication is key. However, simply communicating is not enough as it is important to employ 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.