By Gavin Dimmock, GM and VP of EMEA for Terminus
Marketers historically have focused attention and budgets on the top of the funnel, leaning on strong sales and customer success teams to support the middle and bottom of the funnel activity. But, that mindset quickly changed last year as the pandemic took hold and retaining customers became increasingly critical.
Now, marketers and revenue leaders are increasingly converging to focus in one a new primary KPI: customer lifetime value (CLV), which is a function of net churn. Or, put another way, roles have changed. Instead of focusing on only top of the funnel activity, revenue teams are now charged with maintaining and growing an existing customer base, while influencing the customer experience from beginning to end.
And, for good reason. Customer retention is critical to a company’s bottom line for a few of reasons:
- Strong net retention provides consistent growth (especially through a downturn)
- Strong net retention means more opportunities for expansion
- Happy and successful customers are more likely to be your biggest advocates
A good customer retention strategy begins and ends with targeting the right high-value customer accounts with data. Then, driving engagement with said customers with personalized, multi-channel campaigns followed by activating a customer success team with the right data to drive focused plays based on engagement activity. And, finally, measuring these customer activities for optimization. If you’re thinking to yourself “this sounds quite similar to a strong account-based marketing strategy,” you’re spot on. A customer retention and expansion strategy is ABM at its finest.
Influence the customer experience from beginning to end
We like to call this Px to Cx at Terminus, but that’s just another way of saying a customer’s experience–from the prospect experience to becoming a customer– is a cross-functional effort that is both universal and exceptional. How are we treating our customers long-term? This sits with the CRO at our organization, but it’s a true cross-company effort centered around CLV and its critical role in influencing revenue.
We revamped our org structure to center around the customer experience, and completely rethought our onboarding process to show ROI within 30 days. From phone calls to emails to messaging materials and beyond, it’s critical for the experience to be universal, seamless, and delightful from start to finish.
Don’t market to customers as one.
Customers are in all different industries, with different strategies and use cases. Some customers may be more sensitive to economic fluctuations than others. Instead of segmenting customers in a way that works best for your efforts, segment customers on data according to specific data like annual customer revenue, industry, renewal date, and intent data as a few examples.
The tighter the segmentation, the more effective a strategy can be. Once mutually exclusive, and exhaustive segments are created, tier out your segments to support sales, marketing, and CS teams in their understanding of how to prioritize activity. For example, tier one could represent customers with the highest expansion potential or the largest contract values with healthy app usage. This segment represents your best customers, meaning teams can prioritize ongoing success. Whereas a tier three segment could represent customers with lower contract values and low product usage. This list represents customers with some risk involved and means teams should increase contact focused on driving value with specific needs.
Effectively engage customers
A strong customer engagement strategy can’t stand on a one-off newsletter. Remember, customers are busy. It’s critical to adopt a multi-channel that keeps customers close to product updates, events, big news, and so on. This strategy should be tailored to segments.
So, in addition to that newsletter, consider leveraging sponsored content on LinkedIn (and other social platforms) to drive targeted messages by way of display ads. And, you can build on-page personalization programs to greet customers in a different way. Plus, consider tapping a high-volume ad channel like email signature marketing to automatically target customer segments with specific and differentiated ads when you’re already in communication.
Partner customer success and marketing
Gone are the days of just marketing and sales alignment. Bring customer success and marketing teams together to drive alignment just as you do with sales teams – or, revenue teams. I suggest a weekly meeting between sales and customer success, followed by a bi-weekly meeting with all three teams to drive the customer engagement strategy forward.
A LinkedIn study found 605 of sales and marketing organizations globally cite a lack of alignment as undermining financial performance. Whereas, companies with tightly aligned programs grow revenue 24% faster than peers while improving customer retention by 35%.
Bringing sales and marketing together has been a ‘hot topic’ for years, but it’s customer success was a part of that mix because who knows more about customers? Critical to the success of this alignment is activating customer success counterparts with the right data they can take to drive highly-focused plays based on a customers’ engagement activity.
How often are customers visiting the company website, logging into the app, communicating with a CS team, etc. Every organization is different, but a handful of baseline customer engagement metrics we track and work to improve upon includes retention rates, expansion opportunities, website visits, and app usage.
Growth is of the utmost importance for revenue leaders. It’s time to focus on a full-funnel approach. Now is the time to align marketing programs for driving continued top of funnel activity, while collaborating with sales and customer success to build out smart customer campaigns that deliver value, drive engagement, and keep your customers happy from the prospect stage and through the entire customer lifecycle.