Because of the high cost today of generating business-to-business leads and customers today, retention is critical. Even though it is critical, you know you cannot spend more than you can recover in ROI. How do you boost retention and achieve a good ROI?
Retention is the measure of how long customers have bought from your company. It is often linked to the amount they buy because buyers who spend a lot of money on your products obviously like them and maybe even depend on them.
It is essential you know the rate at which you retain your customers within a certain period of time, such as the percent who bought again in 12 months, 24 months, 36 months, etc. If you look at your entire database, you can easily see the average amount of time between purchases.
Some product categories have more time between purchases and some less. There is even a propensity between certain products or product categories and retention rate. This is sometimes due to good or bad qualities of the product itself and sometimes due to the nature of the product. Unfortunately, a low retention rate is often linked to poor customer service.
Here are some economical tips you can use to maximize b-to-b retention:
Acquire high quality leads with the potential for high retention
Sometimes you can acquire customers with a product that typically attracts new buyers who turn out to retain well. Saving money by lowering your cost to acquire b-to-b leads and/or customers may be a smart move, if and only if, these customers continue to buy. Otherwise it is a false economy.
Calculate the retention of individuals and companies
You need to look at different branch locations, as well as the full purchase history of the company. You need to profile individuals and businesses based on their ability to be retained. Once again, you can use these segments to decide how much to spend on each segment. The ones with the higher potential to be retained justify a larger marketing spend.
Create a customized, multichannel contact strategy
Just as some products seem to predict good retention, some channels and offers do as well. You need to test to identify these. For example, some high retention segments in b-to-b may prefer added value, such as content to discounted pricing.
Solicit feedback and listen to it
This is where social media works for b-to-b marketers and not just b-to-c. B-to-b marketers are increasing their use of techniques like blogging and LinkedIn at an astounding rate. Invest in a dialogue with those segments with high retention. They will repay your investment.
Maximize your site retention
There is a high degree of change in business today, but the large purchases are still done by a group and include the usual folks: specifiers, influencers, buyers, etc. The key is to reach these people as their titles and positions change, and as new people arrive. The greater you penetrate a site (the more names you have at the same business), the better your possibility of retaining that site. When you ask an individual with high retention for another individual’s name at that business, you usually get a low cost and higher retention referral. The more good referrals you get, the better your site penetration and retention will be.
Obviously, a lot of these activities –calculating retention, segmentation, testing, site penetration, etc. are dependent on a clean database with recent and accurate information. You can purchase information to enhance what you have, but you have to invest to keep it clean.
Decisions you make using poor or missing data will not be good. A low cost but excellent way to keep your data clean is to work with (and reward) your sales force and inbound /outbound telemarketing teams to capture and update information critical to boosting b-to-b retention.
Mary Ann Kleinfelter is president and owner of marketing consultancy Marketing Solutions Today.
Once you have tested a contact strategy that is designed to increase retention in a particular segment, you are in a position to calculate the cost of that strategy and the sales you can expect from that segment. The result will be an estimate of ROI by segment.