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Customer retention is becoming more of a priority for B2B marketers lately. As buying shifts online and marketing takes on some traditional sales roles, retaining existing customers is essential for driving growth and profits.\u00a0<\/p>\n
Luckily, B2B retention marketing differs significantly from consumer retention efforts that rely heavily on discounts and perks. Instead, B2B retention requires a laser focus on the core business, meeting customer expectations consistently, penetrating existing accounts further and monitoring any changes closely as signals for proactive outreach.\u00a0<\/p>\n
This article outlines essential retention marketing strategies and tactics tailored specifically for a B2B context to strengthen customer relationships, prevent churn and maximize lifetime value.\u00a0<\/p>\n
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For as long as I\u2019ve been in B2B marketing (don\u2019t ask), lead generation and new-account acquisition have been the top priority for marketers. Year after year, survey after survey, leads were number one.\u00a0<\/p>\n
But, at last, B2B marketers are beginning to grasp the importance of retention marketing for profit growth. Sagefrog\u2019s 2023 report<\/a>, amazingly, listed customer retention as B2B marketers\u2019 number two priority. (It didn\u2019t even make the Sagefrog priority list in 2022.)\u00a0<\/p>\n I see three drivers behind this stunning change:\u00a0<\/p>\n This last one is a biggie. Millennials and Gen Z are rapidly entering the B2B buying group. They expect to do business through digital channels. They expect to buy for their companies on their mobile phones.\u00a0<\/p>\n These buyers don\u2019t want to talk to a salesperson. And who is stepping into the breach? Marketing! They are the firm\u2019s digital-channel experts. They have also been trained in concepts like customer management, LTV and the financial value of loyalty.\u00a0<\/p>\n At last, marketing professionals are slowly getting involved in customer management and customer experience, adding value to areas like customer success and account management. Thus, retention is gaining traction again as a strategic B2B marketing priority.\u00a0<\/p>\n But let\u2019s remember that retention, loyalty and value expansion in B2B are different from B2C. Buyers may place orders on their phones but still buy for their companies. The buying groups are still growing bigger every year as companies seek to reduce risk. So, our strategies and tactics in B2B not going to be the discounts, points and perks you\u2019ll find in consumer retention marketing.<\/p>\n Dig deeper: Where B2B brands win and lose on customer retention<\/a><\/em><\/strong><\/p>\n Let\u2019s review the best retention marketing strategies for B2B. Unsurprisingly, they differ dramatically from best practices in consumer retention marketing.\u00a0<\/p>\n The first essential strategy in retention marketing is to deliver on the promise made to your customer at the point of acquisition. Satisfying customer expectations is the foundational requirement for sustained business operations. Any dissatisfaction in product, service or overall experience creates an unbridgeable gap in retention efforts.\u00a0<\/p>\n So, the first step in crafting a retention plan is to ensure that the product is robust and competitive and all facets of product marketing are in place. The product\u2019s features align with market demand, its quality is up to par, and it\u2019s appropriately priced and distributed. In short, a maniacal focus on the core business is essential. Without this, any investment in retention programs is a waste.<\/p>\n The same logic applies to problem resolution. When a customer\u2019s issue with a product or service remains unaddressed or is poorly handled, retention efforts will prove ineffective.<\/p>\n Addressing such concerns is far from straightforward. With rising buyer expectations, businesses must elevate their service standards to unprecedented levels. Yet, traditionally, customer service has been seen as a cost center \u2014 a financial burden rather than a source of profit.\u00a0<\/p>\n However, we know that robust customer service significantly contributes to customer retention and, by extension, to long-term profitability. A customer whose issue has been promptly and effectively resolved is more likely to remain loyal and repurchase than one who never encountered any issue. This presents a compelling case for a new view of the importance of investing in the service function.\u00a0<\/p>\n Dig deeper: Humanizing B2B: The key to better customer experience<\/a><\/em><\/strong><\/p>\n Viewing customer acquisition as an expense or an investment, it follows that profitability emerges only with customer retention. Thus, a company\u2019s real financial gains depend on a penetration strategy.\u00a0<\/p>\n Penetration marketing aims to maximize customer value by optimizing current-customer sales. In consumer marketing, this is often called wallet share. In business contexts, we use the terms account penetration or account expansion, which is the responsibility of the sales personnel assigned to that account.<\/p>\n Penetration marketing comprises two primary sales tactics:<\/p>\n Sales professionals are natural up-sellers and cross-sellers within their accounts. However, the sales team\u2019s efficiency can be significantly enhanced through marketing strategies powered by database marketing. Proven techniques in B2B are next-best-action (customers who did this are most likely to do that next) and reasons to call (customers who did this are likely to be interested in that).\u00a0<\/p>\n Dig deeper: 4 steps to turn a prospect into a loyal customer<\/a><\/em><\/strong><\/p>\n The most effective strategy to keep customers is to keep them from leaving. Powerful anti-defection strategies are available to the vigilant marketer. Customers typically exhibit warning signs. You must identify crucial indicators, establish mechanisms to detect these signals and take timely interventions.<\/p>\n A notable illustration of this approach comes from the marketing analyst Jim Novo, based on the idea of \u201clatency.\u201d Novo observed that customers\u2019 purchasing habits generally remain consistent, and any alteration in these habits could signal an underlying issue, presenting a chance for proactive engagement.\u00a0<\/p>\n For instance, if a customer has a history of buying every 60 days and this interval passes without an order, the vendor should reach out immediately. This could simply reaffirm the commitment to exceptional customer service if the lapse is inconsequential. Conversely, it might uncover a grievance, offering a swift opportunity to address and resolve the issue.<\/p>\n Many marketers find themselves trapped in the cycle of one-off sales. With each customer interaction, we push for another purchase, often risking becoming a nuisance while shouldering significant sales expenses.<\/p>\n Imagine transitioning a customer to an ongoing purchasing model. Convince them to agree to a regular delivery of products or services, with terms set in advance and automatic fulfillment. This approach shifts the customer into a replenishment model, a concept that revolutionized inventory management in the manufacturing sector with just-in-time deliveries.<\/p>\n Adopting this model reduces the effort and expense of repeated sales efforts and ensures more stable and predictable revenue. Remember, it does require a larger initial investment in customer acquisition, as you need to discuss and agree upon the nature of the perpetual arrangement at the outset.<\/p>\n Certain industries, such as telecommunications, financial services, pharmaceuticals, SaaS and media, inherently operate on this model. Yet, there\u2019s no reason other businesses can\u2019t adopt a similar approach for specific customer segments or product lines.\u00a0<\/p>\n Examples of successful applications of continuous selling models in B2B include:<\/p>\n Drawing inspiration from the consumer sector, some business marketers have successfully implemented frequency marketing initiatives that incentivize customers for behaviors like repeat purchases. These strategies aren\u2019t universally suitable for all business contexts, but they thrive under certain specific conditions:<\/p>\n A prime example of where rewards programs excel is in industries with purchasing dynamics similar to those of consumer markets, such as office supplies. Staples, for instance, operates a successful rewards scheme targeting its small-to-medium business clientele.\u00a0<\/p>\n Beyond traditional frequency-marketing programs, business marketers have devised numerous strategies to encourage preferred customer actions. Historically, special service levels have been a popular method.\u00a0<\/p>\n Top customers might receive priority through dedicated account reps and customer service support or exclusive access to a specialized Intranet for around-the-clock ordering under pre-agreed terms, complete with insights into corporate purchasing trends.<\/p>\n Despite the brilliance of your retention marketing, a tragedy may occur at some point. You lose a customer. But this is not a time for despair. Customer defection presents an opportunity.\u00a0<\/p>\n The first step in reversing a defection is carefully considering whether you want the customer back. It could be that this customer is simply not right for you. That the cost to serve is too high. That the margins have been beaten down to the point of unprofitability. Letting the customer move to a competitor who can make the relationship profitable may be better.<\/p>\n But if the customer is of value, then a win-back process is the next step. First, find out what went wrong and try to fix the problem. In most business marketing situations, this part of the process is the province of customer service or account management. They must assess the situation and quickly apply the solution that will bring the customer back to the fold. These reps must be knowledgeable and empowered to take fast action.<\/p>\n In many cases, fast triage will not solve the longer-term problem. So businesses are well advised to create dedicated win-back sales teams. It\u2019s hard work, especially for a regular salesforce focusing on volume and fast opportunity. The win-back sales team needs special training and, above all, special compensation to work on bringing customers back.<\/p>\n Dig deeper: Driving growth through data: Optimizing the retention stage<\/a><\/em><\/strong><\/p>\n Retention represents the source of all profits. To focus on providing ongoing value to customers, identify opportunities to improve that value, prevent at-risk customers from defecting and reactivate profitable customers when they do defect \u2014 these marketing activities will ensure maximum shareholder value. It\u2019s certainly a positive development that B2B marketers are increasing their focus on retention and loyalty.<\/p>\n <\/p>\n Get MarTech! Daily. Free. In your inbox.<\/p>\n<\/p><\/div>\n<\/p><\/div>\n<\/div>\n \n<\/div>\n Opinions expressed in this article are those of the guest author and not necessarily MarTech. Staff authors are listed here<\/a>.<\/em><\/p>\n\n
1. Meet and exceed customer expectations<\/h2>\n
2. Top-shelf customer service<\/h2>\n
3. Penetration marketing<\/h2>\n
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4. Prevent defection<\/h2>\n
5. Convert to auto-replenishment<\/h2>\n
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6. Loyalty programs<\/h2>\n
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7. Win-back efforts<\/h2>\n
Retention marketing revisited for B2B<\/h2>\n