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Five Strategies to Boost Customer Retention

Five Strategies to Boost Customer Retention

You don’t buy a car and forget to put gas in it. Don’t acquire a customer and neglect to nurture it. A recent shopping experience reinforced some of my thoughts about the importance of advocate and retention based marketing.

Rule No. 1, Never Lose  a “Customer”
Rule No. 2, Don’t Forget Rule No. 1 Warren Buffet (American business magnate, investor and philanthropist)

We’ve all heard the story. Your company pays big bucks for a software solution and the rep disappears faster than a Justin Verlander fastball. On the marketing side, most programs are designed for acquiring new leads, not retaining them. Keeping customers via retention based strategies is often an afterthought.

In the high tech industry, lack of retention focus can lead to shelfware, wasted investment and a nonrenewal at renewal time. Why? New logos and acquired leads are often some of the KPIs management evaluates to measure the growth of a business.

What retention policies can your organization adopt to keep your customers coming back for more?

A Tale of Two Retail Approaches

intrior of shopping mall

Within two weeks after New Year’s, I took the dreaded trip to the mall to return some holiday gifts. I first went to REI and Nordstrom. Both stores have retention based strategies that focus on the post-sale customer experience. Both took back my items without a blink. In addition, REI has a loyalty program to promote return customers and Nordstrom is known for its liberal return policy.

My third trip was to Louis Vuitton, one of the premium brands in fashion. Not only does Louis Vuitton have a limited 14-day cash return policy, it doesn’t extend the policy for the holidays (Which just about every store does). It’s the same kind of policy I’d expect from Bill and Ted’s Discount Stereo but not from a luxury brand. Certainly, they would make an exception for a repeat customer but subsequent requests to customer service referred back to the 14-day policy.

To summarize, two of the above brands focus on the customer experience after the sale while one doesn’t. Side note: To be fair, support via LV’s Twitter account is fast.

Five Strategies for Retaining Customers

Business strategy concept

Companies focus on acquisition more than customer retention, even though it can cost 7x more to acquire new customers.

Get Satisfaction Infographic

If your organization doesn’t have a retention based strategy and focus, consider adopting one. At the highest level, always provide value after the sale from both a marketing and sales perspective. Make retention a goal and measure it.

Here are a couple of strategies to consider adopting. After six months of adopting some of the below strategies, I saw one company’s renewal rates jump from the 70s to the 90s.

1) Change the Conversation

Top B2B organizations utilize content that is specific towards its customers to help educate users and executives on the benefits and uses of the existing solution. Remember, customers have already purchased the solution so “why to buy” eBooks are no longer relevant. Instead, deliver content that helps your customers leverage its existing investment.

For companies with web personalization technologies like Marketo Real-Time Personalization or DemandBase, change the experience for customers when they visit your site. Instead of offering trial offers, switch the conversation to best practice case studies.

2) Develop a Retention Based Marketing Approach

63% of marketers felt that new customer acquisition is the most important advertising goal.

Get Satisfaction

Educate with an Onboarding Strategy

Offer content to transition the journey from prospect to customer. One example is an onboarding strategy. Deliver key content weekly for the first three months that provides top usage tips. As a double benefit, these communications should also reduce the drain on your customer support team.

One of our clients saw big gains in this area when it took top support questions and rolled them into a post-sale best practices series.

Make the Renewal a Formality

When the time comes for the renewal, make sure your customers can easily justify the extension. Consider creating a renewal nurture stream that kicks off 90 days prior to the expiration of the software. Use surveys and other content to ensure that the customer is leveraging the solution. And if it isn’t, offer best practices to help the customer show a return on investment.

3) Create a Community and Customer Advocacy Program

There is nothing better than turning your customers into advocates. I won’t go into detail in this post but know that customer advocacy is a key component of retention. Hank Barnes (@Barnes_Hank) from Gartner recently covered this topic in a blog post.

Companies like Influitive, NextBee and Amplifinity are a few players in the space.

The number one source for understanding the differentiation of a technology provider was peers of the same size in their industry (60%)

Gartner

4) Develop a Post Sale Role

Change the language of your post sale roles to build brand loyalty and become a trusted advisor. Your reps are no longer Sales Managers–they become Success Managers and Onboarding Experts. Their focus is to ensure a smooth experience throughout ownership.

The efforts of the Success Manager should run parallel with the above marketing retention efforts.

For example, while marketing is sending the onboarding emails weekly, the Success Manager should call the customer leveraging the same onboarding language. Businesses should use the same process when the 90-day renewal email hits.

5) Become the Trusted Advisor and Provide Value

Don’t call the customer one month before the renewal and expect success. Don’t just rely on your website to do the work. Make sure to set yourself as a thought leader throughout the year and provide value. If you don’t, your competitors will.

The biggest challenge for salespeople isn’t that the Internet creates greater value. The biggest challenge is that their competitors have greater business acumen and situational knowledge, and that these salespeople can create greater value for their clients throughout the entire buying process.

Anthony Iannarino – TheSalesBlog.com

A great example is a company that I used to work for in the database security space. Whenever there was a major breach or vulnerability found, our marketing team would drop everything and put on a special webinar to educate our customers on the latest threat. Additionally, the Success Team would call in tandem to offer real value to customer. The end result was an improved customer relationship which helped improve retention rates.

Summary

To summarize, top organizations recognize the importance of retention based marketing. Don’t just think about the initial sale, think about the lifetime value of the customer. A happy customer is much more likely to purchase from you in the future.

And if you are going to drop big bucks on a designer purse or bag during the holidays, know the return policies.

About Jeff Coveney

Jeff is an accomplished marketing expert with more than 20 years success in generating demand and creating buzz for leading technology organizations. Jeff is the founder of RevEngine Insider and regularly consults via RevEngine Marketing.