The rise of retention marketing as a strategic priority in 2017
Why should marketers be putting the spotlight on retention marketing? Contributor Heather Timney explains how shifting your focus toward existing customers will positively impact your bottom line.
It’s no longer a secret that nurturing existing customers is important to the long-term financial success of business-to-business (B2B) companies. That’s because by now everyone is aware that it costs considerably more to acquire a new customer than to keep an existing one.
It should come as no surprise, then, that retention marketing is moving up the priority ladder in the B2B world, making it critical that marketing departments command a more prominent role in the overall customer experience strategy.
As experts in customer communication, marketers are among the best positioned to lead the charge in rolling out well-crafted programs designed to build deeper relationships with customers.
This aligns with a report by Gartner that showed 25 percent of chief marketing officers say leading the customer experience is the most-increased expectation CEOs have of them. In fact, at our Voice of the Customer consulting firm, we’re certainly seeing marketing departments take an increasing role in owning, or at least influencing, their company’s customer experience strategy.
As marketers, though, much of our success is measured by the outcome of our new customer acquisition strategies. This makes it a challenge to shift our attention and precious marketing dollars toward existing customers. But it’s time to do just that.
Why the spotlight on retention marketing?
Your existing customer base is a veritable gold mine of not just sales opportunities, but free goodwill and promotion as well — not to mention that having lots of happy customers makes your job much easier, as you have more consumers to choose from to support your marketing goals.
As billionaire investor Warren Buffet so perfectly put it at a Goldman Sachs event, “Any business that has delighted customers has a sales force out there that you don’t have to pay. You don’t see them, but they are talking to people all the time.”
In addition to recommending you to others, satisfied customers positively impact your bottom line in a number of ways:
- They are more open to upsell and cross-sell opportunities, increasing their lifetime customer value.
- They’re less price-sensitive because they know you’re worth it.
- They are more resistant to outreach efforts by competitors.
For all the benefit they bring, isn’t it worth devoting a bit more of your marketing resources toward ensuring your existing customers are fully catered to?
Let’s look to the wireless industry as an example we can all relate to. Have you ever switched from one wireless carrier to another provider? Further, ask yourself — how loyal are you towards your cellphone provider? Do you feel catered to?
As consumers, we often feel as if wireless carriers don’t do a whole lot to support their existing customers; it’s all about new acquisitions for them. Imagine what it would do for sales figures and retention numbers if just a fraction of their marketing dollars were redirected toward programs that resonated with existing customers and generated better brand loyalty.
Now put this into context with your business. Are you missing opportunities to keep customers actively engaged (and spending more) with your brand?
How marketing can lead the way
Customer satisfaction can no longer be one department’s job. It’s a force in and of itself that’s becoming a bigger contributor to revenue as company leaders realize all the potential benefits (and reap the rewards) of catering to this audience.
But to be most impactful, the internal and external messaging needs to be carefully crafted and aligned, and targeted programs must be creative and well-executed.
If you’re ready to get a seat at the table, or want maximize the impact you already have, here are some questions to consider:
1. Are we delivering on our brand promise?
I think we can all agree that a brand promise is essentially a contract between you and your customers. It sets the stage for the experience they should expect to have. Every single employee should know it, from the top on down. And through your actions and the way it’s communicated, your customers should know it, too.
If you’re failing to measure up to your customers’ expectations, you stand to lose any loyalty you have built up.
To gain visibility, start by taking stock of your business objectives and comparing them against the customer experience. Is your internal and external messaging consistent?
You may also want to consider a formal program called a Customer Perception Audit, which paints a picture of the customer experience and details expectations, preferences and satisfaction levels of your customer segments.
Establishing a Customer Advisory Board is another good idea. This is a small group of key customers who meet with your leadership semiannually to share feedback on a range of topics affecting the customer experience.
Marketing can use information from these programs to fine-tune messaging strategy, creation and execution to bring what you do and what you say you’ll do into closer alignment. And with better alignment will come improved customer satisfaction as they enjoy seamless brand experiences at every turn.
2. Who are our most satisfied customers?
Chances are your company is gathering feedback from customers on some level. Perhaps it’s with informal tactics such as social media monitoring or formal methods such as customer satisfaction surveys. Is your marketing department leveraging this information to build the brand reputation? Differentiate from the competition?
You should also think about different ways to channel brand evangelists to fuel growth. For example, would your loyal advocates be willing to share their story at your annual industry conference? Securing a speaking engagement is just one surefire way to help generate more leads and increase revenue. For more ideas, take a look at this blog we wrote on cozying up to your Promoters.
Of course, it’s nice to focus on feedback from enthusiastic customers, but it is often the complaints or concerns that yield the most actionable insight. So don’t overlook unhappy customers when developing your retention marketing strategy.
3. Do we have a strategy for growing ancillary revenue from happy customers?
How can customers gain more value from your products and services? Are you meeting their needs? A systematic approach to measuring customer satisfaction will give you the data to more confidently target customers for upsell and cross-sell opportunities.
But make sure it feels like an authentic expansion of their buying history with you. As we learned from the recent Wells Fargo scandal, you never want to force people into buying or signing up for things that really aren’t relevant to their needs.
Instead, look to Amazon for inspiration. Their product suggestions are legendary in the industry for cross-sell and upsell opportunities customers find valuable. They use their customer data wisely to provide a top-notch experience. You can also see it in the way they roll out exciting new features, like their innovative Dash quick-purchase buttons. A few top customers are invited to test, then it’s rolled out to its dedicated Prime membership base.
4. What are our competitors doing?
Sure, this article is about maximizing existing customer relationships, but understanding the reasons you win or lose business is an important ingredient in keeping customers happy and primed for growth opportunities.
To get started, go talk to your salespeople. Ask how your company is perceived in the market and how they are differentiating your company from the competition. Find successes and replicate them in your retention marketing efforts. Understand your weaknesses; does it indicate a pattern?
You can also engage an independent third party to conduct a sales win-loss analysis, which is a program that digs deeper into the purchase decision from an unbiased perspective.
The ROI of retention marketing
What does this tell us? It’s no longer up for debate that companies with high customer satisfaction and client loyalty tend to do better financially. But consistently instilling the messages that drive true culture change and promoting the behaviors that define a company as “customer-centric” needs to be a well-coordinated strategic priority. And the marketing department can help be a driving force in this goal.
With a dedicated investment in creative retention marketing programs, positive results will surely manifest on your company’s bottom line in 2017.