03 October 2016 Category: Insider Perspective
Many companies focus their resources on winning new business at the expense of post-purchase engagement. In the B2B sector, this often happens because it is trickier to measure customer loyalty and justify the cost of retention campaigns than it is to prove ROI for each new acquisition.
Considering the amount of time, effort and money it takes to acquire new B2B clients, however, it makes sense to nurture these valuable relationships. Existing customers are a source of income that just can’t be ignored. According to Bain & Company, increasing customer retention rates by a mere 5% boosts profits by 25% to 95%.
Post-purchase engagement is a complex process that requires sustained effort and commitment across the organisation. Once a business relationship has been forged, you need to pay close attention to how your customers are treated by every brand representative, at every touchpoint, at every stage of the customer journey. The goal is to keep adding value and earning trust in order to reap the long-term rewards of customer loyalty and advocacy.
Let’s look at how you can develop a more robust post-purchase engagement strategy that continues to benefit your customers and your business.
KEY POINTS TO CONSIDER POST-PURCHASE:
Act early, reap the rewards
Effective post purchase engagement is an ongoing process that needs to be implemented throughout a customer’s lifetime. The first step is to take full advantage of the on-boarding process.
Consider the early stage after the initial sale or first contract has been signed as the ‘honeymoon phase’. At this point, customers have just invested in your company and are receptive to engagement. According to Experian, for example, email open rates double in the period directly after purchase.
This is the perfect time to reach out to your customers and make them feel secure in the choices they have made. Opt for meaningful communication over generic messaging, whether you type a personal email or pick up the phone to find out how things are going for them. Nothing makes a new customer feel cared for and valued better than human interaction.
This early-phase contact is about more than thanking customers for their business. It is a valuable opportunity for B2B firms to:
- Ask whether customers are satisfied with their purchase and the service received to date.
- Find out whether they need any help as they begin to use your solution – without overwhelming them with too much detail at this stage.
- Build an early understanding of your customer’s needs, challenges and goals that will help nurture the relationship and guide communications in the future.
- Expand beyond one point of contact at the organisation by finding out who the key users, influencers and decision-makers are.
- Gain more comprehensive data for your CRM and marketing automation systems to enable effective segmentation and profiling.
By creating a positive customer experience and human connection right from the very beginning, you’re more likely to build trust and forge a lasting relationship.
Look at each customer’s lifetime value
When developing a customer retention strategy, it is important to remember that not all customers are created equal. It is therefore advisable to segment your customers, based on accurate data gleaned early on in the customer orientation process, so that you can prioritise and invest in those who will bring the highest return in the long term.
This encourages firms to look beyond the value of the current customer relationship (i.e. its impact on this quarter’s profits) and consider how it could change over time. Knowing how much each customer will be worth to your business overall guides the amount of time, money and effort you should spend on retaining this customer right from the beginning.
There are various ways to predict and quantify customer lifetime value (CLV). Whatever method your firm chooses, CLV remains a crucial metric because it helps to shine a light on the true rewards you can reap from post purchase engagement.
Ongoing communication is vital, but keep it relevant
Once they have been orientated and segmented, it is time to integrate your clients by acting on your promises. It is also important to stay in touch. Research shows that existing customers are open to ongoing communication, provided this is relevant and reciprocal. So base your interactions on the knowledge you have gained thus far, with the general aim of checking in with your clients to find out whether the solution and business relationship as a whole is meeting their expectations.
Essentially, you need to facilitate a two-way dialogue with your customers. Instead of only focusing on up-selling or cross-selling, make sure you are also listening. When your customers make an effort to respond or engage, acknowledge that you have heard them. Then act on their concerns and advice in good time, to show that you care.
When problems or questions arise, it is especially important for you to provide a resolution quickly. Research indicates that 95% of dissatisfied buyers will purchase from a brand again if a complaint is resolved quickly. This goes to show that you can minimise and even reverse the negative effects of a bad customer experience, but only if you listen and act fast. To this end, it may be a good idea to implement a policy that sets a timeframe for responding to complaints, comments and questions.
And make it truly personal
Personalised communication is a fundamental requirement of an effective post purchase strategy but, when personalising, it is important to consider how you use different channels. Digital channels provide a good source of data and insight into customer interests and preferences but there is a limit to the depth of that insight and the level of trust they engender.
For example, building customer personas based on analytics, behavioural and transactional data, to support your automated programs can be an efficient route to personalised communications but those customer personas must be meaningful. If communications rely on a superficial understanding of customer needs or an inaccurate customer viewpoint, they may be perceived as somewhat lazy and impersonal.
Using a mix of channels to achieve appropriate levels of personalisation based on customer lifetime value allows you to ensure a highly personalised approach for those customers that offer the greatest potential return. Once you have understood the potential lifetime value of each customer, you can tailor the level and type of communication accordingly. For lower level accounts, this might mean less frequent phone interaction, alongside regular email and digital interaction across multiple touchpoints.
For high value customers, where it is important to develop authentic and credible long term relationships built on real trust and understanding, more regular human to human contact and a structured framework of account management will help nurture trust and deepen engagement. With increased depth of understanding, you can offer key clients a high quality and intelligently targeted service and proposition, strengthening your relationship and inspiring greater loyalty and repeat business over time.
Make customer retention a company-wide mission
According to Kissmetrics.com, 63% of marketers believe that new customer acquisition is the most important advertising goal. This attitude is surprising, given that so many studies point towards existing customers as a richer source of profitability.
Perhaps this decision is indicative of the fact that many sales and marketing executives believe that post purchase engagement is the responsibility of the customer service or technical support team. Of course, these functions do play a crucial role in encouraging repeat business and building customer loyalty, but it’s essential that every part of the business shares ownership of the post-purchase engagement strategy.
If you look at the short term gains from acquisition compared to the long-term rewards of building customer loyalty, it makes sense to involve every business function and every relevant marketing channel in your retention strategy. The more comprehensive your plan, the more effective it will be in optimising the ROI of every new customer you acquire.
Every customer touchpoint, both online and offline, represents an opportunity to deliver value to your existing customers – whether you’re calling to remind them that their contract is due for renewal; inboxing them about an exciting new product feature; or responding promptly to a request or complaint.
It is vital that you view interactions across all channels as one cohesive campaign so that you can be sure you’re maintaining a healthy balance between give (adding value) and take (asking them to spend more).
As discussed, it pays to keep your B2B customers engaged. Loyal clients – those who have enjoyed a positive experience with you – are more likely to continue investing in your products and services, as well as recommend your solutions to their peers.
It is important to remember that post-purchase engagement is about more than working through a tick-list of interactions. Rather, it is about forging a meaningful connection early on, gaining an in-depth understanding of each client’s pain points and requirements, and engaging them with ongoing communication that is both personal and relevant. By focusing on facilitating their success, you’ll build longer-lasting partnerships based on mutual value.