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Five B2B Customer Retention Strategies to Propel Your Business

Posted by IndustrySelect on Tuesday, November 24, 2020

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4 MIN. READ

We’ve all heard the folk song “Make new friends, but keep the old. One is silver and the other gold[i].”

Substitute the word “friends” for "customers," and you have found the key to a successful business model.

Recently on IndustrySelect, we explored some proven ways to create seamless customer experiences in B2B. Today, we are going a step further and taking a look at some strategies for improving customer retention. 

Simple Customer Retention Statistics

Customer retention is expressed in a simple equation[ii]. Start with the number of customers that you have at the beginning of a time period; add the number of new customers (in case they are retained); subtract the number of customers lost; divide the number of customers lost by the number of customers at the beginning of the month; multiply by 100 to express your retention rate as a percentage.

Use variables that make sense for your industry. If you manufacture ink cartridges that are highly expendable, monthly retention is a valid time frame. If you manufacture printers, the time frame should be longer as printers should last longer than ink cartridges.

Retained customers, like the “old friends” from the folk song, are worth their weight in gold. In terms of ROI, new customer advertisements are only 5% effective, while existing customers are likely to purchase additional products or replace their older products with your offerings 70% of the time.

Sales and Marketing Strategies

As the first step of any sales funnel, customer retention begins with sales and marketing.

The first step in selling your product is to know your audience. Your company already has a wealth of information regarding your best customers such as what item(s) they purchase and the frequency with which they purchase. You can also partner with an industry leader in manufacturing companies such as IndustrySelect[iii] to find vital information regarding email segmentation for outreach programs.

This segmentation enables what Forbes calls “humanistic automation”[iv]. A generic email list, company newsletter, Tweet or LinkedIn post can be automated, scheduled weeks in advance so that your customers hear from you on a regular basis. Untargeted, though, such outreach efforts border on spam.

Using segmented lists and hashtags, your sales and marketing forces can tailor the message to better meet the needs of your customers.

Continuing with the ink and printer example, since you manufacture ink cartridges, you know that not all ink cartridges are created equal. Some of your customers use colored ink sparingly. Other customers print everything in color and prefer high capacity tanks.

Still other customers print photographs and use specialized ink cartridges. No matter how loyal the customer is, if he doesn’t print in color, he will not be interested in specialized color cartridges and will view your post as spam. Your photography customers, on the other hand, will be thrilled to hear that your company has created a new printer with high-definition cartridges that will ensure a crisper, cleaner final product.

Keep your Customers Engaged

Once you have identified your key customers, keep them engaged with your company beyond the point of sale. One simple and effective method is a customer survey. Ask your best customers if they could help your company by answering a few, brief questions. Target the questions to your segmented audiences, analyze and act on the feedback that you receive[v].

You can also form an advisory board comprised of a cross-section of your customers. Members from each segment will benefit from hearing how other customers use your products and may well decide to increase their orders or branch out into trying other products that they wouldn’t normally order. Advisory boards often have valuable insights into your ink cartridges – what works well, how to improve the design – that can then be passed along to your product development team.

Create Brand Ambassadors

You can improve customer retention further by turning your highly engaged advisory board into brand ambassadors[vi]. As board members, they would likely be interested in writing user-generated content (UGC) about your products and provide product recommendations.

Studies show that prospective customers are four times more likely to click on an ad with UGC than they are to randomly click on a company-generated ad. Of course, you are trying to sell your product. It’s your business model. However, having another user of your ink cartridges explain how they are superior to any other cartridge carries far more weight with the average consumer.

Chances are good that some of your members’ friends, family and business associates will also see the UGCs. If so, that’s even better for your company, as 42% of consumers are loyal to a brand that is recommended by someone they know and respect, such as a friend or family member.

Teamwork

Working in partnership with your most loyal customers is the easiest and most profitable way to expand your customer base. With their assistance, you will change your new customers from silver to gold, create a cache of ideas for product improvements, and develop meaningful sales and marketing campaigns that will show your gold customers just how much you value their opinions.

To learn more about how IndustrySelect can improve your customer retention strategies, contact us today.


Article Sources:

[i] https://www.songsforteaching.com/folk/makenewfriends.php

[ii] https://www.fool.com/the-blueprint/customer-retention/

[iii] https://www.industryselect.com/

[iv] https://www.forbes.com/sites/forbescommunicationscouncil/2020/02/05/five-churn-reduction-and-customer-retention-strategies/?sh=a7fd856d7fe8

[v] https://blog.hubspot.com/service/customer-retention-strategies

[vi] https://www.annexcloud.com/blog/customer-retention-strategies-manufacturers/

 

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