How much money is your business wasting on the hard slog of momentarily winning a disloyal customer? Is that even something you measure? Growing the wallet share of your existing customers has lower operational costs versus winning new business, but it also has the benefit of improving advocacy, brand awareness, employee engagement and a lot besides.
Yet so few marketers hold on to the customer throughout their journey. For too long they have proudly handed leads to sales only to lose sight of those customers once the deal has been signed. Of course, marketers are then called on to seduce those customers when it’s time to renew their deal, despite having had little to no impact on the things that would influence their decision.
There is a world between those sale and renewal contracts and you, dear marketer, should stick a flag in it.
Switching your attentions to the middle of the customer lifecycle could both differentiate your CX and improve retention, but let’s first look at where marketing’s responsibility typically sits at the moment, and what that customer decision-making process and lifecycle looks like.
Understanding the customer journey
The customer journey has been mapped in many ways, each valuable and most focused on the ‘cycle’ of the customer’s life with you. While it’s commonly accepted that customers act in a cyclical manner (moving from intent to purchase and round again) most marketers recognise there’s a little more to it than that.
The model below demonstrates the four main areas of the customer journey:
The buying cycle is getting longer
It’s becoming increasingly accepted that the ‘Discover’ stage (and its three sub-stages, ‘scope’, ‘evaluate’ and ‘clarify’ as we’ve shown in the model) start before the customer makes formal contact with the business. That means this stage is really the precursor to the customer cycle.
According to recent research, B2B customers will spend up to 20 hours ‘discovering’ before they contact a sales representative. The more expensive the purchase, the more time buyers spend (see ‘The B2B buying cycle’ below). So by the time the customer reaches your sales representatives they already know a good deal about your offering and are looking for answers to specific and detailed questions. While the onus is on still on marketing to drive engagement at the start of the journey, the pressure is on sales to really understand their product by the time that customer reaches them.
The B2B buying cycle is getting longer and harder to crackOn average, B2B customers will spend up to 20 hours researching before they contact a sales representative. The more expensive the purchase, the more time buyers research.Purchases Purchases > $100,000 = 40 hours or more research.While more than a third (40%) of UK respondents say their purchasing process has remained the same over the past 12 months, more than half (53%) said their buying cycle is getting longer. In fact, almost a fifth (16%) say it has increased significantly.Source: ‘The New UK B2B Buyer Experience’, Optimizely
Avoid the churn
Once the customer has purchased and is using the product, the journey again splits off. Some customers will continue through the cycle while others will enter a new phase of advocacy and partnership – the pinnacle of great CX. The mission is always to get as many marketers as possible through that cycle to become a partner or advocate.
Customers can fall away at any point but it’s crucial to know the common points of churn, both in general and in your particular business. This typically happens during the stages highlighted in the model (as ‘lost sales’). These are during the ‘Discover’ phase when customers are scoping and evaluating the product, in the early ‘Purchase’ phase when the customer is trialling it, or at the end of the ‘Use’ phase once customers have had a chance to deploy and review the tool.
Increasingly, businesses are recognising that there is more reward (and less burden) in retaining and growing customers, although internal company cultures are taking time to catch up. For marketers to take a more holistic responsibility for CX they must change their relationship with the business, recognising that marketing is not there to serve and support sales, but the customer. Marketing’s reach should therefore stretch across the customer lifecycle and across the business.
5 steps in improving customer retentionA first step in improving customer retention is to segment existing customers by their projected long-term yield. This gives you an area in which to focus for CX, for example through loyalty programmes or personalisation. Switching your attention to high-value customers may mean sacrificing your lower tier ones. This may need a significant change of mindset from the top down, but if you can’t deliver excellence to everyone it serves to know who best to focus on.1. Segment existing customers by their projected long-term yield.2. Map the top customer segment’s wants and needs.3. Target the top customer segment with loyalty programmes and improved customer service.4. Reward sales and marketing for acquiring long-term customers.5. Consider negative incentives if customers defect before an agreed period.
