July 11th, 2022 / Tags: Planning, Strategy, Digital Marketing
On the path to growth and profitability, companies often focus on bringing in new customers. However, these new customers come with an acquisition cost that is five times higher than the cost of building a more profitable relationship with a current customer. Yet, few companies – only 18% – focus on retention, even though 76% see customer lifetime value as important to their enterprise.
Once you start taking a look at the statistics, it’s obvious that it is customer retention that truly drives profitability:
-The likelihood of selling to an existing customer is 60% to 70%.
-There’s only a 5% to 20% probability of selling to a new prospect
When you increase retention rates by a mere 5%, profits increase by 25% to 95%. Retaining loyal customers pays off in more than just their purchases. Loyal customers often refer new customers, which is another source of profits. Referred customers don’t cost much to acquire, which means their acquisition generates profits sooner.
You already have loyal customers who buy from you regularly, but how do you turn those occasional customers into loyal ones? It requires a robust investment in your customer relationships, making them the center of your marketing efforts. This means collecting and using data, offering stellar customer service, surveying your customers, and taking action from customer feedback.
With statistics like those above, it’s easy to see why keeping your current customers – and keeping them happy – leads to greater growth and profitability. We’ll top this off with another statistic: Your existing customers not only spend, on average, 31% more than new customers, they are 50% more likely to try new product offerings.
Here’s one more stat: The cost to acquire new customers has shot up almost 50% in the past five years.
Loyal customers are more likely to buy from you rather than another brand. And – bonus – they also serve as unpaid brand ambassadors. These advocates supplement your marketing efforts and help your sales team reel in new prospects, starting them further along in your funnel and saving you those expensive acquisition costs.
No one is loyal to a company that treats them shabbily. A positive customer experience leads to 62% of B2B customers spending more, and 76% expect you to know and respond to their unique needs as well as their expectations. Offering a bad experience once means 50% of your customers might switch to a competitor. After several bad experiences, that number rises to 80%. So, what does it take to keep already loyal customers and create new ones?
What everyone wants is to be recognized for their uniqueness. Once they’ve gotten to know your company, they want to be treated like a friend, not a stranger. You cannot give your loyal, repeat customers, nor those occasional customers, the same experience as prospects. The way to differentiate the experience between these audiences starts with collecting and analyzing data.
Look at the processes you have in place to capture data that provides valuable insights not only into what they purchase but also their purchase behavior. Do they like self-service? Do they spend a lot of time viewing product videos prior to purchasing? Use what you discover to reinforce and strengthen the relationship.
-Personalize all of your interactions as much as possible. Communications tailored to each customer make them feel seen and valued. Personalizing a subject line in an email can increase the open rate by 26%.
-How long has it been since they made that big purchase? Check in after a few months. Are they happy with it? Following up and checking on recent purchases is a great way to get to know your customer better and create upsell opportunities.
-Start a loyalty program. Offer member-only discounts or offer points for purchases that they can use in the future. Brainstorm some creative ideas based on your particular industry that lets your customers know you are thinking about them, appreciate them, and offering an incentive for them to come back and shop with you. Of course, your loyalty program will be grounded in customer data. This means your program can be adjusted based on which benefits your customers want.
You’ve made them feel special. Now, it’s time to show them that their opinions matter.
Sure, you want to increase sales and cash in on your customer loyalty, but it’s a two-way street. Your customers want to know that you appreciate their business, even when they haven’t made a purchase in a while.
This is a great way to incentivize your occasional customers to become loyal, regular buyers. Even in B2B sales, emotions – which always factor into buying decisions – are important to take into consideration. You can create new connections while making your brand stand out. Also, B2B marketing strategies that leverage emotional appeal are seven times better at propelling long-term sales, profits, and revenue than a message that simply appeals to logic.
All of your messaging doesn’t have to be about directly making a sale. You want your company to be the first one thought of when your occasional buyer wants to make a purchase. Send them a birthday greeting via email, reach out when they have a work anniversary, or just check in to see how they are doing.
Customer surveys are valuable as well, but only if the right questions are asked. We’ve all received those “How was your experience” surveys, but they don’t tell you much. Instead, ask how you can make things better.
Focus on the customer experience:
-What would (or does) keep them coming back?
-What did they like or dislike about the customer journey?
-Specific questions will yield specific answers that not only inform your marketing but make your customers feel like you value them.
All of this, of course, takes data analytics, not only to personalize messaging but to measure the return for your efforts.
Customers keep buying from you because they get value from your products. Look at the data about your best customers and perform a forensic audit: How did they find you to begin with? Look at the customer journey. What converted them? What was the onboarding process? By dissecting your most successful customer interactions and understanding their goals, you can better inform your marketing efforts.
Look at your sales process. Self-service is a huge draw for B2B buyers. Are there other parts of the process that can be automated to make your customers feel more in control? Where are there hurdles and what can you do to remove them?
Customer loyalty and customer retention should be top priorities for your organization. Nurture your existing relationships to reach your growth goals by providing them with a personalized experience that makes them feel valued and provides a seamless journey they will recommend to their peers.
Shift7 Digital partners with the world’s leading B2B manufacturers to build the incredible digital experiences that help you turn occasional customers into loyal ones and already loyal customers into evangelists for your brand. It’s time to revolutionize your customer service experiences and evolve your customer strategy for the digital age. For more tips and to learn how Shift7 can get you started, reach out today.
-It’s foolish to focus only on bringing in new customers because there’s only a 5% to 20% probability of selling to that new prospect
-On the other hand, the likelihood of selling to an existing customer is 60% to 70%
-Even if you only increase retention rates by 5%, you’ll increase profits by 25% to 95%
-Your current customers spend 31% more, on average, than new customers and are 50% more likely to try new product offerings
-Learn from your current customer data to appeal to new ones.
-Personalization is key, but don’t forget about the little things: emotional appeals sell, keep in touch, and show your appreciation