It’s pretty well documented that retaining customers is far more cost-effective than relying on acquiring new customers, particularly when it comes to B2B brands. In fact, new customer acquisition can cost as much as 5x more than customer retention.
Retention is also important when it comes to B2B because of how long it can take to convert leads into customers. The average B2B sales cycle is about 3 months, with particularly large sales taking 6 to 9 months. This means you’ll need to be constantly acquiring new customers to make sure there isn’t too much downtime between sales and continuously generate revenue. And since this isn’t particularly cost-effective, you’ll be seeing less ROI on your marketing.
If you’re not convinced about the value of retention over acquisition, let’s talk about this in terms of dollars and cents. Increasing customer retention by just 5% can increase your profits by up to 95%.
And yet, the vast majority of marketing efforts remain focused on customer acquisition and lead generation. Only 40% of companies devote equal resources to acquisition and retention, while only 18% place more focus on retention.
But things are changing, with many businesses now looking into the benefits of retention marketing strategies.
What is retention marketing?
At its core, retention marketing is an umbrella term for all marketing activities intended to:
- Keep your current customers.
- Attract previous customers back.
- Encourage your current customers to buy more from you.
Normally, this would just mean feeding them back into your marketing funnel, perhaps with them entering at a later phase since they’ve already qualified as M/SQLs (marketing/sales-qualified leads). But if you’re just throwing the same marketing at them, they’ll a) be bored or worse frustrated because they’ve seen it all already, and b) feel neglected since you’re not putting any specific effort into them, making them more likely to take their business elsewhere. 68% of customers have said they would go elsewhere if they feel like a company doesn’t care about their business.
So retention marketing 101 is to add special segmentation to your marketing funnel for existing customers. This should ensure you’re not targeting them with marketing they’ve seen already, rather you’re making sure they’re seeing content and marketing that applies to them as existing customers.
A more advanced form would be to give them their own funnel altogether: a retention funnel or cycle. With this, you’ll produce marketing strategies and content purely devoted to customers, their needs, and moving them towards further sales.
But maybe you need a bit more convincing on the benefits of retention marketing for B2B marketers.
Why bother with retention marketing?
If you’re still on the fence about the benefits of retention marketing after those stats we threw at you in the opening, let’s take a look at some more to convince you.
- The probability of making a sale to a new prospect is between 5 and 20%. When it comes to existing customers, this jumps up to between 60 and 70%.
- Existing customers spend 31% more than new ones, and they’re 50% more likely to try any new products you put out.
- The longer you retain a customer, the more likely they are to become advocates for you, where they’ll do the job of acquisition for you. They might leave a review about you, or post about you on social media. This kind of user-generated content has been cited as one of the most credible sources of content for B2B buyers. You might even be able to produce case studies involving them, which is considered the most valuable type of content for B2B buyers.
Feeling a bit more convinced? Let’s take a look at some of the tactics that fit under the retention marketing umbrella.
Retention marketing tactics
The main aim of the game when it comes to retention marketing is to ensure that all the interactions a customer has with your brand post-purchase continue to be positive. Satisfaction with the products and services they’ve paid for isn’t enough, you want them to feel happy every time they interact with you, whether it’s immediately after the purchase has been made, support in utilizing your products/services, or looking to make a new purchase.
That’s where retention marketing tactics come in. We’re going to take you through some of the most popular ones, and the effects they can have on retaining customers.
Happy customers are more likely to continue to purchase from you, and one way to do that is to make them feel like they’re your no.1 priority. If you’re presenting them with content that seems tailored towards their needs, then it will make them feel like you’re devoting most of your resources to their needs.
If you have the scope for an accounts-based-marketing (ABM) model, this is pretty much what you’re doing already. But even if you don’t have the scope for that, or ABM’s simply not right for your industry, there are ways to do this.
Properly segmenting your customer base is an extremely useful exercise, making it easy to target them with relevant content. You can utilize automation and machine-learning systems to make sure things like emails are populated with content that’s relevant to the customer while addressing them on a seeming one-to-one basis.
This level of personalized content is tried, tested, and trusted by B2B marketers: 77% state it helps build better customer relationships.
What’s better than having customers? Having customers who make more customers for you! While you can get to the point where your customers are singing your praises through the good old-fashioned combination of high-quality products and top-notch customer service, you can give your customers an extra incentive through advocacy programs.
These act as rewards when your customers refer others or promote your brand. The rewards tend to vary depending on your products and services, but often they take the shape of discounts or coupons.
You’ll want to make sure you find the right balance between making the rewards valuable enough to your customers to be worth their time, while not costing you more than what you’re gaining from their advocacy. But once you find that balance it can be extremely valuable! 51% of B2B buyers cite peer referrals as their most favored type of content, so having a system in place to encourage referrals makes total sense.
If your customers feel like they’re getting something extra with their purchase, they’ll be more likely to purchase from you. It’s a pretty simple concept, but it can be extremely effective. A relatively easy method of adding value is to offer discounts and coupons on their next purchase or reward them with regular bonuses if they keep using your services.
You don’t even have to reward them for every purchase. Think of it like the loyalty cards popular with coffee chains, where you get a free drink once you’ve had your card stamped enough times, or earned enough points from purchases.
A slightly more complicated way of doing things is to give greater rewards the longer a customer remains your customer. This will give a greater incentive to be a long-term customer.
These are ways to incentivize your customers to purchase from you regularly, not just one-and-done. Again, you’ve got to make sure the rewards you’re giving away to your customers impact the gains, but the right balance can massively increase the number of long-term customers you have.
Keeping your customers happy often means making them feel like they’re your no.1 priority. One method for this is to have an extra tier above just being a customer, so it feels like they’re in a more committed relationship. This can take the form of some kind of exclusive community-driven program, which your customers have to qualify for in some way.
Maybe it’s a subscription model, maybe they have to make a certain number or bulk of purchases, or they could be an extremely important account and you just invite them to make them feel special.
Being part of this exclusive community should come with bonuses that aren’t available elsewhere, which could take the form of discounts, priority customer service, invitations to exclusive events, and more, just so long as your customers feel like they’re getting something no else does by being a member of this community.
The examples we’ve given are just scratching the surface when it comes to retention marketing strategies. But they, along with just about any other retention-focused tactics, all boil down to one thing: make it feel like your customers are getting more than what they’ve paid for. Whether it’s in B2B or B2C, people love getting a bargain, and are more likely to return to places where they got that bargain.
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