For SaaS and subscription companies, winning a customer is only the first step in “Customer Lifetime Value”, that is, the expected value over the entire lifetime of a customer. This is why it is important for B2B marketers to focus more on the entire lifecycle of a customer than on their buying journey. However, acquisition is the stage where most marketing strategies stop. The traditional journey is centered on the strategy of acquiring new customers as a way to drive growth. This strategic choice is a double-edged sword in business models with recurring revenue or subscriptions.
For example, if you lose 5 customers this month, you will need to acquire 6 new customers in the same month to make up the shortfall and still create growth. This may seem achievable when the company is small, but as the number of customers increases, it is essential to maintain consistent MRR (Monthly Recurring Revenue).
Develop a customer engagement strategy
The opportunities to lower your churn rate come through the customer experience. The more your customers are engaged and invested in the company, the stronger your relationships will be. Marketers should extend the early experience that helps engage and convert people into customers to those they must retain and satisfy in the long run. This is an opportunity to develop customer experiences that make customers happy and productive with your product or service.
Answering the questions below can help you determine your customers’ engagement with your company:
- What do your new customers need to set up your solution and become proficient in using it?
- Who are the new people to involve?
- Are they achieving their desired goals?
- How can you help them get the most out of your solution?
- Is it easy to do business with you over time?
Onboarding, or support, is a critical stage for new customers. Buying a new product or a new solution means changing an organization. Sending a welcome email is good, but it is far from sufficient. Setting up the product is one thing; helping the user know how to use it is another.
What content, tools, or resources could you offer to generate their enthusiasm and address their questions about your solution? Do you have a customer support program to help them adopt new ways of working? Your customers will not keep paying for poor-quality software. Marketers who work to attract new customers, guide them through change, and help them perceive the added value will help increase customer retention.
Achieving the promised result throughout the buying process is the minimum your customers expect. If the value produced by your solution is not easily quantifiable, marketing can help make that value tangible by showing other people internally what it is. Then, show them how to get even more benefit from it. This is a good way to build new cross-sell and upsell opportunities. Creating a solid retention strategy does not always aim to make more money, but can be just as effective if the goal is to save time. The more a customer decides to stay with you and use the product, the greater their value to your company.
Develop customer relationships
It is common for one person (your “hero”) to work tirelessly to help their company buy your solution. Unfortunately, one of the most common reasons for churn in SaaS or subscription companies is the loss of that “hero”.
Once a customer has been acquired, developing a relationship with the new customer is the smartest strategy. Moreover, if only one person in the company knows your solution, knows how to use it, and they leave, you are bound to be discarded, in other words, to lose the customer.
Expanding your visibility within that company should be part of your customer engagement strategy. You need to work jointly with your account managers and customer success team to create this retention program, but the longevity of the relationships that can be created by increasing the number of people who use and know your product will pay off for customers in the longer term, and they will be more satisfied.
Growth and improved customer relationships also pay off in referrals and retention, two elements that greatly help company growth.
Avoid unpleasant surprises at renewal time
When marketers focus on the relationship to keep the customer active, they are continuously involved in the relationship with them. Interactive content and personalization are marketers’ two favorite strategies. Think about how your retention campaigns can improve your acquisition strategies.
Marketers face a major challenge, which is understanding their prospects and customers and how to speak to them. Getting involved in customer retention and working collaboratively with sales and customer service will help you better understand your customers. You will then be able to develop relevant marketing strategies for customer acquisition. It is truly time for marketers to boldly go beyond traditional funnels and focus on customer lifecycle management.
