Existing customers need less persuading to try your products and more reasons why they should continue the relationship with your company. Savvy B2B marketers are shifting their focus to thinking about the long-term relationship they are creating when they win a new account, as opposed to solely concentrating efforts on winning business. Maintaining and nurturing relationships with customers requires teams across the company to align on goals, data and tactics in order to drive additional revenues from existing customers and accounts.
What steps should B2B companies take to deepen their relationship with current customers?
Marketers who provide an ongoing service to their accounts need to clearly demonstrate the inherent value in being a customer. Educational content and stellar customer service are key tools that enable customers to find success and give them support when problems arise. Once customers understand the value of the relationship, it makes it easier to sell them more products and services. B2B companies with a formal cross-sell and upsell strategy in place are able to introduce accounts to different add-on options. Loyalty programs can also drive behavioral shifts in the customer base. Additionally, igniting customer advocates to share their success stories can encourage incremental growth. Tracking renewal and churn rate is key. B2Bs should also have a winback plan in place to address customers that have defected.
What are the most common activities B2Bs should implement as part of their customer success program?
US B2B marketing executives make regular account updates (82%) a standard part of their customer success programs, according to December 2017 research from Regalix. Also common are tutorials and demos (63%) and live screen-shares to help use the product (60%).
What are common metrics to track customer value?
Customer feedback, as well as data from all customer touchpoints, should be integrated to calculate customer value measures. Common metrics used are cost to serve, lifetime value, net promoter scores and share of wallet. With these measures in mind, B2B companies must look at multiple dimensions, including risk analysis, to determine how much attention and service should be given to accounts. Predictive modeling can determine which accounts have a higher propensity to spend more over time.
WHAT’S IN THIS REPORT? This report examines how B2B marketers and other client-facing teams should approach their customer growth efforts.
Historically, B2B marketing departments have focused primarily on winning new accounts. Once a customer or account is acquired, marketing’s involvement is often over and the relationship is managed elsewhere across the company. Marketing then continues its effort to drive more awareness, leads and demand to fuel the pipeline of new business.
Studies show many marketers are still working this way. For instance, The Partner Marketing Group found that for B2B software and technology marketers in North America, lead generation was the primary marketing objective for 2018, cited by 55%. Comparatively, fewer respondents listed customer-centric growth goals, such as engagement (12%), advocacy/referrals (5%) and loyalty/retention (5%), as primary goals.
The same study found prospects as a more common target audience for nurture marketing. Nearly all respondents, at 96%, said they targeted prospects, whereas only 40% focused their efforts on their current customer set.
Applying These Principles for B2C
While this research is focused mainly on how B2B companies approach customer growth, many of the best practices in this report can be applied by consumer-facing companies that fit the following criteria:
1. The buying cycle for the product or service is long and complex and/or the dollar amount is significant.
2. The product or service is sold into multiple decision-makers (i.e., a family, a household or couple).
3. The product or service calls for regular renewals and/or includes potential to add new features or services that can increase the value of the relationship.
Examples here include: families choosing a college for their child, a household selecting their cable, TV or phone providers, or a person leasing a vehicle.
Within this traditional approach, Ruth Stevens, president of consulting business eMarketing Strategy, estimates that B2B marketing budgets are unbalanced across the customer life cycle. She said acquisition efforts get roughly 85% of the budget, whereas customer growth-related activities get only 15%.
But when revenues are the end goal for a marketing team, rather than just net-new, it opens more possible avenues from which to drive sales. “The lowest-hanging fruit for a B2B marketer are the current customers,” said Sean Geehan, founder of B2B consulting firm Geehan Group. “It is less expensive and a faster cash flow. Companies don’t win by putting 80% of their effort into acquisition. They should put 80% into the growth of current accounts and the rest into acquisition.”
While some marketers are tasked only with lead quantity quotas, known as net-new acquisition strategies, marketers who are responsible for driving revenues tend to be more balanced in their approach to the customer.
US B2B revenue marketers—those responsible for 30% or more of their company’s revenues—think more holistically about the customer life cycle, according to August 2018 research from CaliberMind and Heinz Marketing.
Only 36% spend time generating leads, compared with 94% of their counterparts who aren’t responsible for revenue generation. Instead, 78% of marketers accountable for revenues focused on two things: marketing-sourced revenue through new accounts and revenue influence from existing customer accounts.
When focused on current accounts, B2B companies tend to see higher returns on their contract renewals or upsells. Geehan said that renewals can see roughly 30% more margin because an existing relationship is already in play. But closing new accounts, even if the contract value is the same, will get about a third of the profit because of the costs associated with building that new relationship, including demand marketing efforts, onboarding, training and more.
To add value today, marketers need to progress beyond the binary notion that acquisition and customer growth are two separate things. “There is a misconception that acquisition and retention efforts should be pitted against each other,” said Kevin Williams, senior vice president of customer success at SaaS marketing automation provider Act-On. “In reality, companies have to be managing both initiatives.”
Marketing needs to evolve beyond its traditional role of creating brand messages and meeting demand goals, said Josh Mueller, global head of marketing at data, analytics and insights provider Dun & Bradstreet. “Today, we must focus on full customer experience, including loyalty, retention and advocacy throughout the life cycle.”
This can be challenging, as marketers don’t always have a full view into how a customer is interacting with their company. “Marketers struggle to understand the customer because internal teams and data systems don’t talk to one another,” said Adam Corey, CMO at Tealium, an enterprise tag management software company.
Some companies have figured out how to shine light onto these blind spots. The global marketing organization at LinkedIn has an overall strategy that is focused on the “full customer life cycle,” according to Keith Richey, senior director of global marketing. Then specific strategies and tactics are implemented by different teams to focus on all stages of the mapped experience. “Once a customer has converted, there will be touchpoints in the journey owned by sales and marketing. We need to align those experiences so that it isn’t disruptive to the customer,” Richey said.
Developing priorities—marketing and beyond—around the full customer life cycle can be a drastic shift for many B2B companies. “Organizations need to move from a corporate culture that is product-obsessed to one that is customer-committed,” said Bryan Pearson, president and CEO of LoyaltyOne, a loyalty solutions provider.
Making this change requires support at the C-suite level, where at least one executive must own the customer and enforce shifting policies across the organization. The specific function varies by company, but industry experts have seen that role live with the chief customer officer, the CMO or the head of sales.
Frankly, it doesn’t really matter, as long as that role is truly held accountable for the customer. That leader also needs to implement the following:
There should be no gaps in the experience once a prospective account becomes a customer. While onboarding is necessary for a new customer to get acquainted with the product or service they have purchased, B2B companies should also use the process to collect relevant feedback on the account.
But survey data indicates that onboarding isn’t a top priority for B2B marketers. For example, a welcome email, probably the most basic new-customer introduction tactic, is used by only 53% of US B2B marketing executives as part of their customer success program, according to December 2017 research from Regalix.
Further, an August 2018 survey of US B2B marketing and sales professionals from Demand Gen Report (DGR) and Vidyard found that only 30% employed new customer onboarding programs.
For US B2B marketers who implement customer onboarding, 78% rely on live demos, according to Regalix. Other common content types include phone calls, web walkthroughs with images, videos and text-based content.
Getting your company ready to tackle customer growth strategies might require rethinking the way you work and collaborate.
To learn more about how marketing teams can impact change through digital transformation, read our report “The Modern Marketing Department 2018: Evolution Through Digital Transformation.”
“Right after we sign a customer, we make sure to provide the best onboarding experience,” Mueller of Dun & Bradstreet said. On the checklist for this process are: automated emails, FAQs, videos and the option to set up an initial meeting with the dedicated account rep.
Ipswitch implements a 30-, 60- and 90-day onboarding process for new customers, said Jason Williams, community director at the IT management software company. The accounts team is largely responsible for onboarding and establishing the relationship with the customer, but other teams support the effort; marketing, for example, sets up automated messages.
Onboarding is an opportunity, in the early stages of a contract, to position the deal as more than a transactional relationship—but instead, a partnership. “During onboarding, we seek to understand where our new customers want to go with their business and how we can bring value and help them reach that goal,” said Irvin Gray, head of marketing at intelligent wireless charging provider Chargifi.
This is also the time to ask questions. “Within 30 days of the deal closing, there should be an interview with the key decision-maker to find out why they bought from you, what their expectation is and how they define success,” Geehan said. That interview adds foundational account knowledge, will go a long way to service the account, and will also be good insight when it comes time for renewal.
Not all customers are equal in value. B2B companies should have a rubric in place to evaluate and essentially score or rank their current customer set. Such a framework allows marketers and all customer-facing teams to align on how to best serve and grow each individual account in a profitable manner.
There is no one-size-fits-all approach to customer growth. Strategies should be tailored specifically to what your company knows about the individual account. Qualitative feedback and data are the foundational elements here.
Dropbox, for instance, emphasizes “the voice of the customer,” according to Adrienne Gormley, vice president of global customer experience at the content collaboration provider. Customer feedback is systemically collected via “listening posts,” or various touchpoints across the customer experience that are designed to gather comments. This can be through the web experience, in the product, through regular surveys, phone calls with sales people or via actual customer support agents.
“We want to know how our customers feel. We collect feedback across the journey through data, social listening and even call transcripts, so we know if customers had a positive outcome or a bad experience,” Gormley said. All of this feedback lives in a centralized system.
Further, capturing customer engagement data is pertinent, Corey of Tealium said. “We drill into the underlying data points to see how customers are engaging with our product, our team and our community.”
Also relevant, according to Stephen Yu, principal and chief product officer at customer intelligence software company BuyerGenomics, is customer historical data, including purchase and renewal history.
This is more than just CRM data. Customer demographics, any online spending data, customer service and support logs, website behavior, data from advertising platforms, mobile touchpoints and automation/email providers must also come into play. Additionally, if applicable, offline behaviors should be considered.
However, integrating these data points and systems with overarching customer intelligence solutions, such as customer data platforms (CDPs), remains an ongoing effort for most B2Bs. June 2018 research from The Relevancy Group found that while CRM (61%) and customer profiles (58%) were data sources integrated with CDPs, most other data systems were not integrated by the majority of US B2B senior marketers.
Integrating these disparate data sources is hard. Roughly half of US B2B marketing executives said getting actionable insights from customer data is a challenge of ensuring the success of their customer success program, according to Regalix.
However, feedback, when married with all relevant data from the customer, can provide B2Bs with a great deal of insight into the account and how it’s behaving. Accurate and up-to-date data on all accounts is necessary to deliver on this framework.
Predictive analytics and models should also be applied to determine what accounts have a propensity to cancel or renew. Once all the relevant customer data is in one location, these algorithms and machine learning tools can review the data to identify meaningful relationships between the data and its customers. In fact, Regalix found two in three US B2B marketing executives said they are using or plan to use predictive analytics in the near future for their customer success strategy.
Content Provided by eMarketer.
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