For many B2B marketers, customer retention and loyalty are key to generate more revenue and, more importantly, a higher ROI. The traditional view of marketers is that up-selling, cross-selling, retention and loyalty programs are cheaper than all efforts to acquire new customers.
Although this is generally true and most B2B companies generate most of their sales with existing customers, few businesses really optimize their retention and loyalty efforts in a consistent way. The results are missed revenues and the need to focus more on acquisition than would be the case if a well optimized loyalty program would be set up.
Furthermore, many marketers still underestimate the impact of loyal customers on customer acquisition, among others because they only look at data and don't fully see the impact of word of mouth, which is indeed often invisible in a direct way.
Satisfied and loyal customers are worth much more than the basic customer retention actions, they often "receive". The good old saying that retention is cheaper than acquisition and generates higher margins, doesn't mean customer retention and loyalty programs should be cheap.
Loyalty marketing and relationship marketing: continuously listening and responding
Relationship marketing is underused by many businesses in regard to their existing customers. In some organizations, existing customers don't even know about other products or services that the company sells, due to historic reasons (such as mergers, silos, etc.).
Cross-selling and up-selling is not about campaigns, it is about relationship marketing and retention and loyalty programs. If you have no valuable relationship with your customers, based on social and interactive CRM integration, behavior, customer interactions, etc., the impact of up-selling and cross-selling is simply much lower than when you optimize your loyalty programs in a continuous, consistent and social way of listening and responding across all touch points.
A survey by Loyalty360, the loyalty marketer's association, and SAS end of last year found that, although 44.6% of responding B2B marketers say over 60% of their new sales come from existing customers and 72% says this is the case for over 20% of new sales, only 55.4% have departments that mainly focus on customer retention.
The untapped potential of better cross-channel loyalty marketing programs
Furthermore, most businesses are listening and responding via mainly traditional channels, leaving the untapped potential that resides in customer-defined touch points and new ways of listening and responding. Call centers, websites and surveys play a key role, while social media, email and other interactive possibilities seem underused.
The survey also found most businesses, that do have formal customer retention programs, align them with their customer life cycle program (53.6%). Little over 10% of respondents aligns them with a voice-of-the-customer program.
Noteworthy is that many respondents only start their loyalty marketing programs three to six months after a sale, again leaving untapped opportunities.
Listening to your customer, across all channels and integrating interactions with CRM, should be a top priority for every business now. There are ample opportunities to do so, that go far beyond the traditional channels. As for responding and setting up customer-centric loyalty programs and cross-channel, valuable interactions: there are no excuses to make those programs and activities more relevant, engaging and revenue generating.
I kind of liked the quote from Mark Johnson, CEO of Loyalty 360: "Loyalty is a journey, not a destination-and the path is filled with constant changes and technological advances. Customer loyalty leaders are nimble and able to embrace and respond to this rapid pace of change effectively and efficiently."
I would like to add to that: the journey is customer-driven and thus multipurpose, multistage and multichannel.
Today's customer is cross-channel and he/she is at the centre of sales and marketing.
Communication channels depend on the consumer and marketing is about engaging the cross-channel customer and prospect throughout integrated dialogues that are driven by his/her buying journey, preferences, triggers, signals and behaviour.
Discover why your business should move to an integrated marketing approach step by step and how.