There’s never been a truer statement than the one we’ve heard over and over again for generations – ‘the customer is always right’. Companies of the past masterfully identified the need to retain the customer at all costs which has since been magnified by the rise of the digital age.
With competitors working like piranhas, it’s no great surprise that, we too, have accepted this notion of putting the customer first and find ourselves in the mist of a customer revolution. From CRM systems to the implementation of Customer Success teams, we’re pushing ourselves to provide the very best quality in Customer Intelligence product and service. However, are we guilty of jumping on the bandwagon with little or no insight into what a customer retention strategy actually means for our business and how we can successfully achieve it?
The History of Customer Retention
‘The customer is always right’ was popularised by Selfridges Founder, Harry Gordon Selfridge in 1909 and has been championed by globally iconic brands ever since because the tactic has delivered on its hypothesis. In 2012, Selfridges broke the £1 billion sales mark followed by it’s most profitable hour in it’s 100-year history in December 2015 with over 130,000 descending on the Oxford Street store. So did Harry have it right all along?
We all understand that the customer battlefield differs from B2C to B2B industries, but the importance of a slick customer retention strategy remains the same. According to a study by Totango, 80% of a company’s future profits comes from 20% of it’s existing customers so you must invest in building loyal relationships with the people that effectively make your business a success.
What Does a Customer Want?
Finding the ultimate solution to your target market’s greatest challenges is the main hook for any customer choosing you over your competitors. However, the customers’ needs and buying habits have evolved substantially since the millenials took the world by force. Now, customers require a service that makes them feel valued above all else – much like a relationship, they want to feel loved.
A study on Why Companies Should Invest in the Customer Experience by Zendesk revealed exactly what impresses a customer. 40% of people began purchasing from a competitive brand because of its reputation for great customer service alongside 85% that would pay up to 25% more to ensure a superior customer service experience. You must understand that successful customer engagement is key to developing a customer retention strategy that works.
Customer Retention Strategy – The Break Up
Unlike our B2C compatriots, B2B Sales and Customer Success teams must have clearly defined responsibilities. Any overlap in the departments or miscommunication that leads to providing inadequate service can result in the loss of your customers, which is counterproductive to your customer retention strategy.
To put it simply:
- The role of the Sales Rep is to do one thing and one thing only and that is to sell.
- The role of the Customer Success Specialist is to retain current customers and not to generate new ones.
Sales are at the start of the customer journey whilst Customer Success continue that journey post-sale. An easy way to remember this is that Customer Success Specialists can upsell but not cross-sell. If a customer wants to buy a new product that you sell, they must be transferred back to the Sales team so that they can embark on a new Sales process.
Recruiting the Best in the Business
Once you’ve identified the differences between the two departments, it’s then time to turn your attention to recruiting the Customer Success Managers that can bring your clinical customer retention strategy to life.
Founder and CEO of Ebsta, Guy Rubin advises “Heading up a Customer Success team is a tough job. Get a Customer Success Manager on-board that has extensive experience and the know-how of implementing a successful customer retention strategy. They must understand the the importance of churn rates and give their input on how they’re going to achieve the golden goal of net negative churn. They should bring their own strategies to the table and back those strategies up with impressive numbers. You should have complete confidence and faith in that chosen individual to keep your customers renewing year after year.”
Much like any recruitment process, you should outline the clear goals that you need your new Customer Success Manager to meet. According to Totango’s study, the goals of the Customer Success Specialist is 57% product adoption, 55% churn reduction, 47% on-boarding and 42% customer advocacy.
The Power of On-boarding
The most important step in the customer retention strategy is on-boarding. Once a customer has purchased your product/service, 9 times out of 10 they’re left out in the wilderness with little or no beacon of light.
Here at Ebsta, we’ve found that customers respond well to the change in norm of having a Customer Success Specialist reach out to them to provide product training. This isn’t a one-off experience that should be cold and impersonal – your Customer Success Specialist needs to excel at embodying your company values. Your customers should feel that they can go to their Account Manager with any queries or problems that they have regardless of if they’ve been told the answer thousands of times before.
Response Times – Are you Quick Enough?
Those with a substantial client database tend to struggle with impressive response times because their database is combusting with data but is completely nonsensical. Their database should hold vital information regarding each individual Account but with Users inundated with other tasks, that information doesn’t get fed into the database. So what happens? Customers grow increasingly frustrated that their query hasn’t been acknowledged.
Response times are one of the most important Customer Success metrics to be tracking so you should set ‘goal response times’ that will effectively blow all of your competitors out of the water i.e. Any product issue or question should be acknowledged within X amount of time before any prioritisation of importance occurs.
Investing in the Right Tools
Companies that are serious about a customer retention strategy will see the benefits of having a CRM system. Take Salesforce as an example – you need your Customer Success Manager and Specialists to have instant into Accounts so they can determine any problems or issues that could prevent the customer from renewing.
Our latest tool provides Users with the Customer Intelligence they need to save Accounts before they’re lost to a competitor. Ebsta Score is a number between 1-100 that’s generated by Ebsta’s analysis of interactions with a customer or prospect. By providing real-time insight into the level of engagement, the Ebsta Score helps you identify which Leads, Accounts and Opportunities have been neglected and are at risk ahead of time.
Utilize Your Early Adopters
By 2020, customer experience will outweigh the importance of price and product according to Walker’s analysis of the future of B2B customer experience. This means that you must be showering your early adopters with attention during their initial stages of using your product/service. Your early adopters are the ones most likely to give you feedback that can improve your product/service and become brand ambassadors for case studies and testimonials. Early adopters are also the most likely customers to renew with your organisation having had a positive experience.
Consider Loyalty Schemes
Loyalty schemes are a clever way of keeping your customers and you should consider them as an option in your customer retention strategy. Think about many of the shops that you buy from on a day to day basis – the majority of them have a ‘loyalty card’ or points system that provides you with an enticing benefit for shopping with them.
For B2B companies, a loyalty card isn’t the answer but a loyalty scheme definitely can be. If Rangers LTD has been a customer of yours for two years but are now thinking of going elsewhere, show them the value of their loyalty. Offer them a customer discount in exchange for a signature on the dotted line or free annual cinema tickets if they sign up to another two years. Keeping your customers can be a strategic and clinical move but it can be made stronger with some creative input. Reward your customers with the customer service that they deserve.
Developing a Customer Retention Strategy
Keeping your customers is no longer dependent on the quality of your product – you have to strategize to give yourself the best chance of retaining the majority. Get yourself in the mind-set of building long-lasting customer relationships and remember ‘the customer is always right’.
Ready to gain insight into customer relationships? Try our Customer Intelligence tool for free today!