June 29, 2020
The 5 Keys to Customer Retention in 2020
In the age of COVID-19, the old adage about a bird in the hand being worth two in a bush is truer than ever. As budgets shrink and decision-makers become more cautious, maximizing the revenue from your current customer base takes the driver’s seat over acquiring new customers.
Justin Keller has been championing this ABM approach to funnel-building for over 15 years. With his extensive background in B2B marketing, he’s more confident than ever that, in the era of COVID-19, keeping customers happy and expanding their use of your product or service can make all the difference in your revenue.
So, how do you ensure you’re delighting your current customer base and giving them the content and attention they deserve? Let’s look at some statistics, secrets, and plays that will ensure you continue to grow, regardless of the economic forecast.
The Case for Customer Retention
The reason is simple: If you’re losing customers, it can’t necessarily be offset by acquisition. What’s more, your customers weren’t free to acquire. It is 5x more expensive to acquire a new customer vs. retaining a new one, so in addition to the loss of recurring revenue, you’re also taking a hit on CPA. Therefore, focusing on the bottom of the funnel is the most important strategy you can implement going forward.
Why? As Justin puts it, “The more customers you preserve, the more at-bats you will have for expansion.” Even more importantly, today’s happy customer is tomorrow’s champion— an essential ingredient of your marketing strategy when you return your focus to the top of the funnel in the future.
The 5 Keys to Customer Retention
- Target the right customer, based on good data. Review your segmentation by industry, CLV, NPS score, relationship strength, and renewal date, targeting those in the best position to respond to (and benefit from) your outreach.
- Keep them engaged across every channel. “Your newsletter is not going to cut it anymore,” Justin explains. “You need to make sure you’re talking loudly across every channel to make sure your message is heard.”
- Understand your customer behavior. Knowing when to reach out, and what to reach out with, will create a much better experience for your customer.
- Measure your success and prove that what you’re doing works. Having the data to understand how your customers are engaging with your efforts is key to retention marketing success.
- Don’t forget the secret ingredient: your CS team! Make sure you’re taking advantage of their knowledge through standing weekly meetings with CS. Doing so can improve retention by almost 40%.
If the above sounds a lot like Account-based Marketing (ABM), Justin assures us it should! “In reality, customer marketing is the purest and simplest form of ABM.
Why Does ABM Increase Retention?
- The effectiveness of AMB for customer retention and expansion marketing boils down to a few important factors:
- Your customer is already your ICP
- The account is already mapped – you know who the stakeholders and decision-makers are.
- You have clearly established business outcomes that you’re are trying to help them achieve.
Running Your Retention and Expansion Program
Analyze Your Customers
- Your best customers: “Pull out all the stops for these high-value accounts to keep them happy and successful,” Justin says of this important segment. “Happy customers are happy to chat about adding more into their business and expanding their business lines.”
- Mid- to High-LTV customers: Customers potentially showing intent for a competitor or low usage. Examine the areas in which you can create a stronger relationship with this segment.
- Low-usage or low satisfaction: Identify the issues and increase their usage and happiness.
Make the Right Moves
- Spend Wisely: Invest in ads, with an emphasis on customer marketing over acquisition.
- Segment Well: Extend the value of the content you’re creating by tightening your customer segments use case, challenge, and industry.
- Monitor Intent: Look for churn signals such as a drop in app usage. Understand the reasons and solutions. Educate your customers effectively by using 1-to-1 data provided by CS, relationship data, etc.
- Assess Resiliency: Identify the industries doing well during COVID-19, and tailor content to those searching with intent. Focus on those customers doing really well (or really poorly) will give you an edge in retention.
- Boost Brand: Those brands that boost branding and ad spend during downturns realize up to 275% growth once recessions end.
Focus on the Long Game
Programs to Run Now
Register below to watch the full on-demand session with Justin, including his in-depth program planning flowcharts for your upcoming expansion and retention campaigns available through our The Show Must Go On virtual event.