How customer retention strategies create the ultimate competitive advantage


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It’s not a secret that loyal customers are good for an organization or brand.  With 51% of B2B customers citing that they will avoid vendors after a bad customer experience, it’s easy to understand why many executives want to focus on their customer loyalty strategy.  But what’s interesting to me is how few companies employ a focused customer retention strategy that truly acknowledges, takes care of and leverages those best customers in a way that measurably accelerates market share and recurring revenue while mitigating competitive risk and reducing sales and marketing costs.

Customer Retention vs Customer Acquisition

At most companies, customer retention strategies play second fiddle to a jacked-up lead generation budget and a full sales team that has lots of support and attention from company leadership.  Meanwhile, the centerpiece of their customer retention marketing strategy consists of a newsletter, maybe some training articles posted to the blog, and an 800-number if customers have questions.  This is a broad generalization, but you get the point (and you’ve seen these “best” customer strategies, both at companies you work with and for, as well as directly as a customer of others).

Customer Experience Improvements

What makes your best customers loyal?  For many organizations it boils down to a nebulous concept — the customer experience.  How are your current customers perhaps your most valuable competitive edge?  Here are a few ideas to improve customer experience and create a loyal customer base.

Treat them right.  Deliver a fantastic product or service – and you can count on their business for life.  Engaged customers buy 90% more frequently, spend 60% more per transaction and are five times more likely to indicate it is the only brand they would purchase in the future. On average, they’re delivering 23% more revenue and profitability over the average customer.

Be remarkable.  Not only in what you deliver to your customer but how you deliver it.  Surprise them with your responsiveness, speed and approach-ability – not only will they treat you like a loyal friend, they’ll also tell their friends and colleagues about you as well.  Creating a remarkable customer experience helps to create happy customers who remain customers and are your best source of new business.

Earn their trust. The way you deal with customer feedback from your most frequent users is important in developing a trusting customer experience.  Even if the feedback is negative, studies have shown that if their issue is resolved, they are 84% less likely to decrease their spend.

Engage them regularly throughout the customer life cycle.  A consistent cadence of value-added outreach that starts with your top-of-funnel acquisition strategy and continues through the sales process to onboarding and active engagement starts to develop a consistent customer experience that can progress to trust and loyalty.  When your customer is happy, your company or brand will be top of mind when asked for a referral and you’ll be the first one they tell when something goes wrong.  Rather than spreading bad news about you, they come to you first when you screw up, and give you time to fix it.

Actively listen to your customers.  This is a technique that can turn an adequate customer service transaction into a positive customer experience that lead to customer retention.  It’s about building human connections by listening for the customer’s underlying emotions.  Successful sales people and skilled customer success reps do this.  The more consistently your organization can utilize the technique to connect on the human emotional level with customers, the more loyal they will be.

Create an army of ambassadors from your most loyal customers. Your most loyal customers should be an extension of your sales force.  This doesn’t happen by accident.  Instead, it starts with good service and a commitment to customer retention and maintaining high-levels of customer satisfaction.  As a result, your existing customers will buy more from you, and they will your best referral source for new customers and get you and your brand into sales opportunities where you otherwise would have zero access.

Involve your customers in creating the future.  The best way to retain customers and ensure your best customers continue to be strong advocates is to involve them in determining the future of the product and company.  Create a top user or best customer advisory group.  This group can be your eyes and ears; alerting you of new features, testing new use cases, and identifying competitive threats before they become a problem.  Use your customer advisory group as a sounding board, ask them to brainstorm new messaging, offers, and you will likely get far better, more creative ideas than you’d ever come up with internally.  Advisory groups can also be used as a resource for your content development efforts like customer case studies and testimonials.  Lastly, the customer advocacy group should be your strongest sales reference, helping you to seal more deals with new customers.

Any customer experience initiative can seem overwhelming, but you can do this.  Rebuilding a your customer experience and retaining more customers is not for the faint of heart.  It is the long game.  But there are small things you can do to get started now.  And most of it doesn’t have any incremental direct hard costs associated.  Instead the cost comes in the form of change.  Change in how you define customer success, change in your vision of customer experience, change in your strategy and how you deploy your resources (people and budget) to implement it all.

Think about it this way — your customers desperately want to stay with you, they want an amazing customer experience from you.  They’ve made a commitment to you (in a big or small way), and all they ask is that you return that commitment to them.

There’s no question in my mind that every business has significant and measurable revenue potential when they turn some of their attention from customer acquisition and refocus on customer experience improvements.

What can you do now to start working on the experience you provide your customers?  Share your thoughts in the comments below.  Or, check out our recent episode of Sales Pipeline Radio which featured Joyce Brown, VP of Customer Success at Allocadia who spoke about The Art & Science of Customer Loyalty: Community, Advocacy and More.


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