Customer marketing pros know keeping a customer is easier than acquiring a new one. If a company can increase its customer retention rates by 5 percent, they will increase their profits by 25 percent to 95 percent. And while that may be a dated statistic from 2000, not much has changed. The 2015 survey by Pacific Crest Securities and OpenView found on average that it costs $1.18 to acquire each dollar of first-year revenue as opposed to only $0.13 to retain (or $0.28 to up-sell) an existing customer.
So how do you do keep your customers? And how do you do it on #GetToKnowYourCustomersDay? Here are my five tips for winning at customer lifetime value (and getting to know your customers better along the way). These are lessons from the School of Hard Knocks, learned from earlier missteps with my past customers and clients.
1. Think Long Term
Many companies are heavily focused on acquisition and being able to show to their investors, the media and who-knows-who-else that they are continuing to grow quarter over quarter, year over year.
But are those new customers renewing when their contracts expire? Are they growing their business with you beyond the special deal you offered to hook them? Investors call this “sloppy growth.”
Yes – you, me and everyone else needs to continue to hustle to bring in more customers. But we should be doing so with the intent that those customers will still be there a year from now, and five years from then. You want to do better than just gain new customers at a rate equal to your churn.
When you have that know-your-customer mentality, it’s much like a relationship with your partner or spouse. You begin to make sure you’re paying attention to them and their needs, and not just your own. It may not hurt a marketer to pick up a relationship book from their neighborhood bookstore, read it, and think about how those lessons can be applied to the relationship between them and their customers.
Being honest. Being transparent. Being an empathetic listener. Being available. All those are human-to-human traits you should be bringing to your relationships with your customers.
2. Listen Before You Speak
First, you need to be listening to your customers the entire year, not just on one hashtag holiday. Are you checking in with them on a regular basis? What type of listening programs do you have in place? Do you have a way for your customer success or service folks to share the customer feedback they receive with marketing, sales, accounting and anyone else who may be touching the customer?
Is your social media team monitoring channels for the good and bad that may be said about you from customers? And do you have a policy – at least guidance – for what to do when they do hear something negative or positive?
If you are jumping into a hashtag holiday, is it on a platform that you have some proficiency on? Are your customers even on that channel? Have they interacted with you in the past on that channel? (It might be embarrassing if you are launching a hashtag holiday campaign and none of your prospects will even hear you.) Have you checked to see what others have done in the past (if this is a holiday that has happened before)? What do your competitors do for this type of event?
And what you’re listening for shouldn’t be solely focused on complaints or praise. By listening and paying attention, you will be able to anticipate an unexpected opportunity. This could be gleaned from customer feedback directly to you about a product or service feature they would like to see, pain they continue to have, or from what your competitor’s customers are saying about their products or services. You might learn about weaknesses they have that give you an edge.
Marketers would benefit by copying the sales mantra to listen, listen, and then listen some more to customers’ problems to better understand how they can help.
3. Help Your Customers Succeed
So you are listening and paying attention to your customers. Are you doing anything about what you are learning? What can you do to be a good, better business partner to your clients? In addition to knowledgeable, proactive, and collaborative support teams, your B2B organization should provide customers a variety of self-service options, such as an online FAQ and knowledge area, or easy-to-digest video tutorials and webinars.
Using our own platform at Act-On, we can see when a customer is using the product or where they may be having some challenges. We can proactively check in, suggest tips, and see what we can do to make sure they are successful using the platform. We can do this via a customer success rep email or phone call, or through our automated programs.
4. Offer Value
Whether you are sending out a tweet, an email, or an invoice, think about ways you can bring value to your customer. I liked how the Junior Achievement folks in Eastern Iowa approached January’s #GetToKnowYourCustomersDay by sharing a link to 10 tips for getting to know your customer (maybe they’ll share this post in the future?).