The case for B2B retention marketing: 7 key tactics

Customer retention has become more of a priority for B2B marketers these days. As purchasing moves online and marketing takes on some of the role of traditional sales, retaining existing customers is essential to driving growth and profits.

Fortunately, B2B retention marketing is very different from consumer retention efforts, which rely heavily on discounts and offers. Instead, B2B retention requires focusing on the core business, consistently meeting customer expectations, further penetrating existing accounts, and closely monitoring any changes as signals for proactive outreach. .

This article outlines key retention marketing strategies and tactics specific to the B2B context to strengthen customer relationships, prevent churn, and maximize lifetime value.

B2B retention marketing finally has its day

For as long as I’ve been in B2B marketing (don’t ask), lead generation and new account acquisition have been a top priority for marketers. Year after year, survey after survey, we were number one in leads.

But B2B marketers are finally beginning to understand the importance of retention marketing for profit growth. Sagefrog’s 2023 report surprisingly lists customer retention as her second priority for B2B marketers. (It also didn’t make it onto his Sagefrog priority list for 2022.)

I believe there are three factors behind this remarkable change.

• COVID-19 has crippled personal selling and established the latest catchphrase: “Retention is the new acquisition.”
• When growing a SaaS business, maintenance and updates are the key to breaking even, as well as profits.
• The massive shift to digital marketing and increasing buyer preference for digital communication channels is inexorably drawing marketing into some of the roles traditionally held by sales.

This last one is a big deal. Millennials and Gen Z are rapidly joining his B2B buying group. They expect to do business through digital channels. They expect to make purchases on their phones for the company.

These buyers don’t want to talk to salespeople. And who is stepping into that violation? marketing! They are the company’s digital channel experts. They are also trained in concepts such as customer management, lifetime value (LTV), and the financial value of loyalty.

Finally, marketing professionals are increasingly becoming involved in customer management and customer experience, adding value in areas such as customer success and account management. Therefore, retention is once again gaining prominence as a strategic priority for B2B marketing.

But remember that retention, loyalty, and value growth in B2B are different than in B2C. Buyers can place orders on their own phones, or they can also buy for a company. Purchasing groups continue to expand over the years as companies seek to reduce risk. So our strategies and tactics in B2B are not discounts, points, and perks like you see in consumer retention marketing.

Digging deeper: Where B2B brands win and lose in customer retention

Let’s take a look at the best retention marketing strategies for B2B. Unsurprisingly, they differ greatly from consumer retention marketing best practices.

1. Meet and exceed customer expectations

The first important strategy in retention marketing is to deliver on the promises you made to your customers at the point of acquisition. Meeting customer expectations is a fundamental requirement for sustainable business operations. Dissatisfaction with a product, service, or overall experience creates an unbridgeable gap in your retention efforts.

The first step in creating a retention plan is to ensure that your product is robust, competitive, and that all aspects of product marketing are in place. The product features are in line with market demand, the quality is up to the standard, and the price and sales are reasonable. In other words, a maniacal focus on the core business is essential. Without this, investments in retention programs are wasted.

2.Best customer service

The same logic applies to problem solving. Customer retention efforts are ineffective if customer issues with your product or service remain unresolved or poorly addressed.

Dealing with such concerns is never easy. As buyer expectations increase, companies must raise service standards to unprecedented levels. However, traditionally, customer service has been viewed as a cost center, an economic burden rather than a source of profit.

But we know that robust customer service makes a huge contribution to customer retention and, in turn, long-term profitability. Customers whose issues are resolved quickly and effectively are more likely to remain loyal and repurchase than those who never experience any issues. This makes a compelling case for a new way of looking at the importance of investing in service capabilities.

Dig deeper: Humanizing B2B: The key to a better customer experience

3. Penetration Marketing

If you view customer acquisition as an expense or investment, you will only make money if you retain customers. Therefore, a company’s actual financial benefit depends on its penetration strategy.

Penetration marketing aims to maximize customer value by optimizing sales to existing customers. In consumer marketing, this is often referred to as wallet share. In a business context, the terms account penetration or account expansion are used. This is the responsibility of the sales representative assigned to that account.

Penetration marketing consists of two main sales strategies:

• upsell: Encourage customers to purchase high-end versions of products, such as upgraded models or bulk products. A classic example of an upsell is seen in McDonald’s famous “SuperSize that for you?” (Interestingly, in response to health-related concerns, McDonald’s announced in 2004 that it would no longer automatically suggest the SuperSize option with each order.)
• cross sell: Offer customers related or complementary products. McDonald’s phrase “Is this fries?” This is a standard example of cross-selling, leveraging existing customer relationships to introduce additional products or services that the customer may need.

Sales professionals naturally upsell and cross-sell within their accounts. However, a marketing strategy that leverages database marketing can significantly improve the efficiency of your sales team. A proven technique in B2B is the next best action (customers who did this are most likely to do this next) and the reason for the call (customers who did this are most likely interested in it) ) is.

Dig deeper: 4 steps to turn prospects into loyal customers

4. Preventing defection

The most effective strategy for retaining customers is to keep them from leaving. Vigilant marketers have access to powerful anti-defection strategies. Customers usually show warning signs. Key indicators need to be identified, mechanisms to detect these signals should be established, and timely interventions should be made.

A notable example of this approach comes from marketing analyst Jim Novo and is based on the idea of ​​”latency.” Novo believes that customers’ buying habits are generally consistent and any changes in these habits may indicate an underlying problem and present an opportunity to proactively engage. I observed that there is.

For example, if a customer has a history of making purchases every 60 days, and this period of time passes without an order, the vendor should contact them immediately. If the revocation is not important, this may simply be a reaffirmation of your commitment to good customer service. On the contrary, it may provide an opportunity to bring the complaint to light and quickly address and resolve the issue.

5. Convert to auto-replenishment

Many marketers feel trapped in a one-time sales cycle. Every time we interact with a customer, we recommend another purchase, often at the risk of being a nuisance and incurring significant sales costs.

Imagine moving your customers to a recurring purchasing model. Convince them to agree to regular deliveries of your product or service by setting terms upfront and automatically fulfilling them. This approach moves customers to a replenishment model. This model is a concept that revolutionizes inventory management in manufacturing departments through just-in-time delivery.

Adopting this model reduces the effort and expense of repetitive sales activities, ensuring more stable and predictable revenue. Please note that customer acquisition will require a significant initial investment as the nature of the permanent contract will need to be discussed and agreed at the outset.

Certain industries, such as telecommunications, financial services, pharmaceuticals, SaaS, and media, inherently operate on this model. But there’s no reason why other companies can’t take a similar approach for specific customer segments or product lines.

Examples of successful B2B applications of recurring sales models include:

• After-sales support service.
• Replacement parts.
• Just-in-time components.
• Consumables such as office supplies.
• Professional services.

6. Loyalty Program

Some corporate marketers have taken inspiration from the consumer sector and successfully implemented frequency marketing efforts to encourage customers to take actions such as repeat purchases. Although these strategies are not universally suitable for all business contexts, they are successful under certain conditions.

• In a competitive market, it is important to have a competitive edge.
• It is necessary to avoid price competition.
• A cost structure featuring high fixed costs and low variable costs facilitates redemption of benefits at affordable prices.
• Perishable inventory. Rapid turnover is required as the value decreases over time.
• Short purchasing cycles make it easy to track purchasing patterns.

A prime example where rewards programs are great is in industries with purchasing dynamics similar to consumer markets, such as office supplies. For example, Staples runs a successful rewards program for small business customers.

Beyond traditional frequency marketing programs, business marketers have devised numerous strategies to encourage favorable customer behavior. Historically, special service levels were a common practice.

Top customers receive priority access through dedicated account representatives and customer service support, or exclusive access to a dedicated intranet with 24-hour ordering on pre-agreed terms, complete with insights into business buying trends. may occur.

7. Recovery efforts

Even if your retention marketing is great, at some point tragedy can strike. You will lose customers. But now is not the time to despair. Customer defection presents an opportunity.

The first step to reversing a defection is to carefully consider whether you want the customer back. Maybe this customer simply isn’t right for you. That the cost of service is too high. This means that profit margins have been cut to the point where they are no longer profitable. Sometimes it’s better to move customers to a competitor who can have a more profitable relationship with them.

But if the customer has value, the next step is the collection process. First, determine what went wrong and try to resolve the issue. In most business marketing situations, this part of the process is the realm of customer service or account management. They need to assess the situation and quickly apply solutions to get customers back on track. These personnel must be knowledgeable and empowered to take action quickly.

Quick triage often does not solve long-term problems. Therefore, companies are highly recommended to create a dedicated sales team for profit capture. This is a tough job, especially for regular salespeople who value volume and quick opportunities. Sales teams that win customers back need special training and, above all, special rewards.

Dig deeper: Driving growth with data: Optimizing your retention phase

Rethinking retention marketing for B2B

Maintenance represents the source of all profits. Focus on delivering ongoing value to customers, identifying opportunities to increase that value, preventing at-risk customers from defecting, and reactivating profitable customers when they do. . These marketing activities ensure maximum shareholder value. B2B marketers’ increased focus on retention and loyalty is certainly a positive development.