Almost two decades ago, Fred Reichheld showed that it costs companies more to acquire a new customer than to keep an existing one — and that smaller changes in post-sale retention can lead to bigger boosts to profitability.[i]
In new research, Forrester shows why B2B marketing leaders need to remember Fred’s findings and refocus on customer marketing to better engage, serve, and retain their current customers (subscription required). In this report, we identify four drivers shifting this function from nice to necessary:
- The adoption of subscription-based business models. As-a-service helps providers optimize supply and innovate faster, but they must retain customers to help attenuate flat or declining revenues during the first few years of transition. Delivering through “the cloud” makes it more important to keep a customer after the deal closes.
- Empowered buyers trust other customers more than marketing or sales. These buyers want to hear from those customers when forming and informing purchases. Marketing must now supply a steady stream of customer advocates to engage these discerning prospects.
- Improving customer experience (CX). Great CX is now an equal business driver to increasing revenue.
- Increasing per-account revenue to deliver more predictable growth. Many B2B firms get substantial revenue from a known number of accounts. Keeping those accounts is essential to future growth.
Responding To COVID-19 Accelerates A Necessary Customer-First Mind Shift
In just a few weeks, this last driver has gained unexpected significance as the economic effects of a worldwide pandemic have, in many sectors, slowed business and altered the ways we conduct it.
Short-term, companies must recalibrate their CX efforts to help customers adjust. B2B marketers who use this unanticipated crash course in digital will also learn how to better engage current customers at a distance to keep them stable and successful longer-term. A distinct marketing function responsible for post-sale communication, retention, advocate production, and growth will become essential at customer-obsessed companies that refuse to go back to “business as usual” months from now when the pandemic has run its course.
Customer marketing must act according to this new digital normal, not just deliver cross-sell/upsell campaigns. As part of marketing, it has access to the technology, processes, and communication skills to not only address the crisis today but to make these hard-won digital CX lessons stick to ensure that brand promises made come through in every customer interaction.
Learn How To Turn Existing Customers Into Valuable Marketing Assets At Summit
During the crisis, customer retention will be paramount. Afterward, marketing leaders focused on the post-sale experience will use marketing to turn their customers into devoted advocates who build the brand by sharing their stories with potential buyers and influencers. To learn more about the practicalities of building a business case for this type of advocate program and the technologies that can be useful in scaling your customer marketing and advocate nurturing, Forrester and SiriusDecisions will host a virtual version of our flagship event, Forrester SiriusDecisions Summit 2020, starting May 4, where customer engagement is high on the agenda.
I hope to virtually “see” you there.
[i] Source: Amy Gallo, “The Value of Keeping the Right Customers,” Harvard Business Review, October 29, 2014 (https://hbr.org/2014/10/the-value-of-keeping-the-right-customers)