By now you’ve probably heard that it’s far more expensive to convert a new customer than it is to retain a former one – and B2B customer retention is no exception. But did you know that increasing your retention rates by just 5% can lead to a 25 to 90% increase in revenue?
In the B2B realm, customer loyalty is a top priority because many of the products and services they sell work best when bought or renewed repeatedly. For instance, a B2B SaaS company that sells subscription services will have a far easier time convincing a client to renew their service for another year than they will finding a new customer to sign up for the first time.
B2B customer retention is a profitable strategy for the long run too, as customers spend nearly 70% more in their third year with a business than in their first. But in today’s highly competitive and quickly growing B2B market, companies are finding it even harder to hold on to their customers who are quick to run to the next option.
Unfortunately, customers these days are quite willing to switch to a competitor if anything goes wrong. So, how can B2B brands keep up their retention and ensure that they stay profitable and successful for years to come?
Here are four smart moves that can positively impact B2B retention rates.
1. Make Sure that Your Programs are Integrated
One all-too-common frustration that customers experience is due to a lack of integrated internal systems. When the departments of a business are not able to easily share information with one another regarding a client, it can lead to mixed messages, lost data, and an overall negative experience that could cost a customer.
For instance, say that a first-time client is having an issue setting up an account online. They call in to customer service and give their account number so they are connected to their account manager.
However, once they are transferred, this account manager has no idea who is giving them a call or why. The customer has to share their information again and explain the issue. The account manager decides that this is actually an IT issue and transfers the client once again to a new department – who has no idea about the situation.
By using an integrated CRM program, you can better apply consumer data sets and share this information easily. This allows each department to stay connected and aware of past interactions and adjust their conversations with the customer appropriately. This in turn can help to create a far more seamless experience that will influence customer loyalty in the long run.
Using a smart CRM system that tracks interactions and custom information can help your team to create a more personalized experience. By knowing important details like past purchases, services they are interested in, or how they heard about the business can be useful during the nurturing process.
For example, the tech company Cisco uses a CRM system that records all interactions, purchases, and other important information for each individual client. Departments have access to that information and can use it appropriately. Their marketing team, for example, creates personalized outreach emails with offers or content that is relevant to the customer. Customer service agents can also access this data to pinpoint issues and reach out to a customer to assist them.
As a result, Cisco has reported that its sales team has increased productivity by 20% – saving themselves time to focus on other strategic tasks. Furthermore, the company has a 4.88 rating for customer satisfaction thanks to this integrated system.
2. Incorporate Attractive and Engaging Brand Advocacy
Your best marketers are happy customers – so encourage your clients to share their experiences to keep them engaged. We tend to trust recommendations coming from people we know (or even people we don’t) over a brand’s marketing message alone. This is why customer reviews are so influential over consumer behavior.
Turning your customers into advocates for your brand is a surefire way to build conversions. One study concluded that just a 12% increase in referrals can lead to a 200% increase in revenue. Further, brand advocates spend twice as much as new customers.
However, unless a customer has an exceptionally great experience or a large network they can recommend your business to, their promotions will only go so far. Consider offering incentives in order to increase customer advocacy.
Creating a loyalty perk program that offers discounts or other types of rewards for direct referrals is an excellent way to turn happy customers into strong advocates. But you need to be strategic about the system you put in place to ensure that it is effective.
- Be sure that your rewards are a strong enough incentive. A few dollars or a small percentage discount might not be very enticing.
- Lay out clear instructions describing how to submit referrals and receive rewards. This may require you to instill a lead capture process which tracks interactions or generates unique referral codes for customers that can be shared.
IT Solutions offers a great example.
They make the rules plain and simple: customers receive a $100 Amazon gift card for each referral once the client agreement is completed. If that lead becomes a customer, then both parties receive $1,000 off of their services. In order to submit a referral, the customer simply has to fill out basic information through a form.
This keeps things simple – plus $1,100 is certainly a great incentive to get customers to submit referrals!
3. Focus B2B Customer Retention Efforts on Service and Experiences
The overall experience that a customer has with your brand is going to be extremely influential on their decision to purchase again. Any glitches in the UX can be all that a customer needs to look elsewhere.
In fact, 51% of customers will switch to a competitor after a single negative experience. However, 69% of customers stated that they would be more loyal to a business if they had a positive customer experience – even if there were less expensive options available with other brands.
Salesforce’s research found that the most common frustrations that people had with online experiences were related to website functions and finding answers to simple questions. While telephone and email are the most popular methods of communication for issues, consumers are aware that other options like online chats and automated self-service systems are equally as effective. That said, should be offering these options to provide solutions for the most common customer experience (CX) problems.
Customer service and account management experiences are key to earning loyalty and keeping B2B customer retention rates up. It is recommended that you offer multiple service options – as clients prefer various methods depending on their situation.
This can be taken a step further by personalizing interactions with relevant content targeting. For example, the SaaS company Kapost shared a story of how they used customer service interactions to improve their marketing approach to resolve future issues.
One customer called in to their support team regarding an issue with content operation within the program. At the time, Kapost did not have any published content regarding the specific question, so the support member helped the customer over the phone while keeping a record of that information.
This data was then sent over to the content marketing team – who created a post to answer that question in detail. This content was shared directly with the customer through a follow-up email and published on Kapost’s website to help future customers with the same issue.
This is an excellent way to improve the relevancy of your content marketing strategy and connect with your specific audience of current customers. By narrowing down your content’s focus to specific FAQ’s (or even not-so-FAQ’s), you can vastly improve each customer’s experience by offering instant information for any questions they may have.
4. Go Above and Beyond with Negative Feedback
When you do receive a customer complaint or a client has a negative experience, be sure that your team has a system in place to not only resolve the issue but go above and beyond the call of duty to turn the experience around. This is the key to good B2B customer retention.
In many cases, you can resolve an issue entirely by apologizing and offering quick assistance to rectify the problem.
We often see these types of interactions on social media, where frustrated customers are quick to vent in hopes that they get a response. It is best that you publicly replies as soon as possible and takes the matters to a private message – like Seamless did in this Twitter interaction with an angry customer.
This eliminates the risk of any more negative comments from a frustrated customer while resolving the issue. After all, 97% of customers looks to see if a company responds to negative reviews or comments, so it is incredibly important that you offer condolences and assist as quickly as possible.
Further, by actively reaching out to the customer – rather than waiting for them to file a complaint – the chances of turning the situation around are far greater. According to Moz, 70% of customers said that their bad service experience was resolved when the business showed that they cared by apologizing or providing assistance.
If you are able to turn the situation around, don’t be afraid to ask your customer to update their review. Customers may not think to do this on their own. But it is important so their negative review does not hurt your company’s reputation.
Resolving customer service issues in a timely manner can certainly help you with B2B customer retention, too. Even if there was a mistake, people are likely willing to give your company a second chance if they know customer service is easy to contact and provides help.
You may be familiar with the phrase: “Make new friends, but keep the old; one is silver and the other gold.”
Well, this can quite easily be applied to B2B customer retention, too. Repeat customers are extremely valuable and require far less effort and marketing to convert than new ones do.
Increasing B2B customer retention rates needs to be a top priority for every department within an organization. And they must work together to make it happen. By connecting every team through integrated systems, improving the customer experience across the board, and incentivizing advocacy, your business can cultivate meaningful connections that lead to long-lasting loyalty with clients.
Joanna Besley is a Content Marketing Writer for E2M Solutions Inc., whose primary writing focus is on marketing topics and SEO. Outside of work, she enjoys exploring the San Diego area hikes, traveling outside of the country, and trying out new vegan restaurants.