Which is a faster path to revenue: acquiring new customers or retaining existing accounts?
If you said account retention, you’re right. Customer loyalty has not always been as cherished as customer acquisition throughout the B2B industry, but now it’s crucial for proving value creation and exceeding revenue goals.
Retention (net revenue retention, specifically) is among the top B2B marketing trends as we head into 2023. To focus on value creation over acquisition means that you need to retain every recurring dollar you can. But here’s the good news: delighting existing customers is not as complicated as acquiring new ones.
Growing customer loyalty has perks, too. Besides a lower churn rate, you can enjoy more customer referrals. If you exceed your customers’ needs, they’ll be eager to leave five-star reviews, act as reference accounts to assist sales, or perhaps be featured in a case study.
Effective B2B Account Retention Strategies
The most effective B2B customer retention program isn’t a flashy or tech-dependent one. Instead, it’s powered by people with a relentless focus on maximizing customer lifetime value.
If you’re in B2B SaaS, it’s best to plan for friction along the customer journey. Product-led strategies are not always ideal. But as executives who scrutinize non-critical spending, you must prepare accordingly.
Here are four effective strategies for creating a loyal customer base:
- Deliver Unrivaled Customer Support
- Clear the Air with a Gift
- Offer Renewal Incentives
- Host Engaging Community Events
1) Deliver Unrivaled Customer Support
As a marketing strategy, unbeatable customer support can be your edge in a crowded market.
I know this sounds like a cliché, but please hear me out. Good companies are available when problems happen. Great companies anticipate them and reach out to accounts before trouble strikes.
We’ve all experienced mediocre customer service. Encourage your team to break the mold of templated account reviews, and don’t limit yourselves to net promoter score (NPS) surveys.
This modified chart, from the ACSI website, makes the opportunity and importance of superior customer service painfully obvious.
The customer experience is inextricably tied to customer satisfaction, both of which are the lifeblood of account retention. When customers’ needs are met, they are more likely to continue doing business with you.
Why should B2B companies care about customer service?
- Customers won’t want to stay if it’s hard to use. If they are upset, they will most assuredly trash your brand at every opportunity.
- A differentiated customer experience fends off competitors. You’re not the only brand trying to grow its number of customers. Anticipate that competitors are trying to scoop them up on social media.
- Personalized customer support demonstrates you genuinely care. Make it a standard level of care by having a senior customer success leader reach out to verify that issues are fully resolved and to collect customer feedback firsthand.
Make it your company’s mission to resolve every issue. This may sound unreasonable, but that’s the point—it proves that you’re committed to the long-term relationship. If you can’t fix every problem, the minimum you can do is to acknowledge it, elevate it to the right people who need to hear it, and offer a concession to show that it matters.
2) Clear the Air with a Gift
Did you neglect an account? Or did the account not get a smooth handoff when the account manager left the company? These dead-ends result in accounts with a higher probability of customer churn.
Consider sending personalized appreciation gifts for otherwise healthy accounts that haven’t had a recent one-to-one check-in. Use the newly earned attention to collect input and feedback about how to improve the product.
These customer engagement check-in calls are gold. Why?
- Your customer success team can observe how someone uses your solution. When friction occurs, you can jot down customer feedback and inform your product management team.
- You can instill confidence in the product by showing better ways to work. Following the onboarding process, this is the perfect time to demonstrate how existing features adapt to the account’s desired workflow.
- You can take note of adjacent tools (such as CRM or marketing automation). This way, you can suggest helpful tutorials and integrations, saving the customer time. This also fosters stronger brand loyalty, so it’s critical to daily operations.
These insights are valuable to product and account management teams, so be sure to record them and listen to them (or watch them) later. And all it will cost you is a thoughtful, relevant, and personal gift.
3) Offer Renewal Incentives for Loyalty
Retaining an account is preferred over acquiring a new one. As such, offering an incentive to stay on the books for the next year or two is encouraged. Likewise, in the same conversation, you can also offer a discount on account upsells or pricing plan upgrades—and they might take them.
Why are renewal discounts a good idea?
- Accounts have already completed the onboarding. Generally, the offer is backed by a lower risk to churn. Following customer onboarding, many of the setup questions have already been addressed.
- It’s often a colossal effort for accounts to move to another solution. Even with a competitive price, it’s tough to justify leaving to save a few dollars per user. Be careful: some B2B businesses waive onboarding costs and include migration services to win new business.
- Sometimes, loyal accounts deserve a break. With regular price increases seen across SaaS vendors, this is the time to show you value the customer’s loyalty. One way to do this is to upgrade their price plan’s features at the same or a lower cost by grandfathering them in at the current rates. Even if no price changes affect them, remind them of the value they’re getting.
A slight decrease in revenue growth metrics is much better than account churn and a noticeable drop in ARR. The B2B payments platform Paddle recommends offering incentives for prepayment with this advice: “Consider offering a lower price for upfront payment or early renewal of an annual plan. Both can be powerful strategies for generating cashflow and locking in revenue.”
4) Host Engaging Community Events
Do not sell. Yes, that’s the first rule for making meetups and conferences worthwhile. Instead, focus on highlighting your rockstar customers and leveraging their enthusiasm to help motivate your average or below-average accounts.
For instance, at the 6sense Breakthrough customer conference, it was evident there was a positive vibe in the air. Top-performing accounts were eager to share their examples on stage with others. And as a result, average users become inspired to expand their uses of the buyer intent data platform.
Why are events beneficial to B2B companies?
- Product usage runs counter to account churn. The more adoption your service has, the less likely clients view it as an expense.
- Inspires additional uses of your software. While one might use a gifting platform for prospecting, they could also use it to scale customer reviews.
- Capturing rich customer content at events. Customer stories, interviews, testimonials are captured once to distribute all throughout the year. In-person events often have an AV team on-site to collect top-tier content. Treat each event as a fruitful experience rather than another lead-generation campaign or cross-selling opportunity.
While in-person events require a considerable investment, the same benefits can be gained from online webinars, workshops, and virtual events. And pairing a veteran customer with a novice can help ease tensions when it comes to learning about new products and services.
By cultivating meaningful events, you’ll build trust within the community of users, which results in higher customer retention rates and more brand advocacy across the marketplace.
Scale Your Customer Success Program with Gifting
The future of customer success teams won’t be defined by vague definitions of the customer experience of yesteryear.
Instead, those teams will be accountable for overall revenue goals enterprise-wide. Then, as marketing teams work more closely with sales teams, they’ll bring on the right accounts—the ones that will stick around and sing your praises.
Deeper customer relationships happen when customers view you not as a vendor but as an ally in their success. Gifting creates a mutual bond that shifts the interaction from KPIs and account goals to chatting about recent mountain hikes and exchanging photos.
Investing in these effective customer retention strategies today will let you reap long-term gains associated with expanding existing customer relationships.