Shrinking budgets and shorter attention spans are forcing companies to rethink how they market and sell products. Successful B2B companies understand that marketing automation is key for generating a steady stream of qualified leads in this highly competitive marketplace. We see this in action every day; Our own Pardot customers have reported a 34% boost in revenue after implementing marketing automation (Salesforce Pardot customer survey, 2015).
But what happens once a lead finally does convert into a customer? Too many companies are continuing to follow a one-sided approach to marketing automation, focusing on acquisition at the expense of retention. In a 2015 study conducted by Demand Metric, it was revealed that marketers spend twice as much on acquisition as they do on retention, even though current customers account for the lion-share of revenue. The research also determined that, in the majority of organizations, there is a lack of clear ownership over retention strategy.
It costs on average seven times more to acquire new customers than it does to keep existing ones, reports Kissmetrics. In fact, the high cost of acquiring customers can actually render many customer relationships unprofitable during their early years. But if your organization is more concerned about lead generation, you’ll miss out on an equally important use of your company’s marketing automation platform: customer retention.
Why Customer Retention is the Name of the Game for Long-term Profitability
Still not convinced that customer retention is the name of the game? Consider these two eye-opening statistics:
- 20% of your existing customers will ultimately be responsible for generating 80% of your future profits. (Gartner Group)
- Increasing customer retention rates by as little as 5% will increase profits by 25% to 95% (Bain & Company, HBS)
Implementing smart retention strategies is key to strengthening customer loyalty, boosting engagement, increasing sales, and generating more referrals. Here’s how to use marketing automation to set up a cost-effective customer program.
Score your customers.
Marketing Automation allows you to step in at the right moment and stop unsatisfied customers from jumping ship – or sell a satisfied customer a new product at exactly the right moment. Your customers with the highest scores — those who regularly download and share your content, interact with your social media accounts, are a fantastic source of additional revenue.
Set up a behavior-scoring model that makes sense for your business. For example, many companies have a scoring system to denote how happy (or unhappy) a customer is — a net promoter score. Use Salesforce to denote which customers have scored you 6 or lower and then trigger a campaign that automatically reaches out to the client requesting time to talk to a Manager on your team.
Another example is to score your customers based on their activity on your website. If they are taking a particular interest a different area of your business, that is a good sign that they are ready to have more formal discussion around your service offering.
Nurture upselling/cross-selling leads.
Upsell drips are designed to capitalize on the revenue waiting in the pool of your existing clients. By providing your existing clients with information and incentives to expand the list of products they are using, you can (automatically) drive more revenue. Be sure to monitor feedback and engagement. If a customer consistently chooses not to take advantage of an upgrade offer, don’t continue email them with the same offer. Doing so could alienate an otherwise loyal customer.
Set up event-triggered emails.
You’re already using event-triggered emails for lead nurturing, right? These are the automatic emails that leads receive when they download a white paper, sign up for a webinar, or take a similar action. Event-triggered emails are also useful for customer retention. Recently onboard a new customer? Set up an email to automatically contact the customer after a week and check-in on how they’re doing. Has a customer been mysteriously inactive over the last month after a period of heavy use? Set up a re-engagement email to check-in and identify ways your team can help. Use the power of Pardot to identify opportunities for engagement early in the customer lifecycle. This helps prevent potential disengagement because of product confusion or by helping them understand the full range of services available at their fingertips.
Pardot’s B2B Marketing automation is a modern business imperative that drives customer loyalty and B2B profitability. There are two key components to customer retention: great products and great service. B2B companies need to invest as much energy into improving their service as they do perfecting their products. Start by scoring customers to identify which are satisfied and which are in danger of jumping ship. Next, use your lead scoring to identify which customers are qualified for an upselling/cross-selling campaign. Finally, nurture these existing “customer leads” with an automated marketing campaign.