Customer retention is a valuable source of bottom-line growth for every business model. Loyal customers spread word-of-mouth marketing and bring repeat business at a higher profit than new customer acquisition.
If your looking to delight your customers and create predictable, high margin revenue—the SaaS industry holds a trove of valuable insights about increasing customer retention.
In our series, “CX Lessons from SaaS,” we examine the CX innovations and strategies this industry uses to create sustainable growth, and how they apply to other business models.
You see, the entire SaaS business model relies on its ability to maintain a healthy and growing customer base to fuel continued growth—thus the industry has found some unique approaches to keeping customers engaged and helping them achieve results.
One of our favorite SaaS revelations is the role that marketing teams play in customer experience and retaining customers.
While this may sound off at first, let’s see how marketing teams—or at least the skills you’d typically find on a marketing team—can increase customer lifetime value.
A Quick Review on The Value of Investing In Your Customer Base
Incredible revenue potential exists within every business’s customer base.
In case you’re skeptical of growth from customers you already have—there’s been considerable research to demonstrate that investing in your customer base and their ongoing success is a long-term profit generator.
Here are just a few stats that you should consider before discounting the value of customer retention efforts:
- Acquiring a new customer can cost five times more than retaining an existing customer (HBR).
- 80% of your company’s future revenue will come from just 20% of your existing customers. (Gartner Group)
- Improving your customer retention by just 5% can increase your company’s profitability from 25% to 95%. (Bain and Company)
- The success rate of selling to a customer you already have is 60–70%, while selling to a new customer is 5–20%. (Marketing Metrics)
Maintaining your active customers is just good business sense—even if you aren’t a SaaS business.
Marketing’s Role In Customer Retention and Revenue Growth
It surprises some to hear that their marketing team plays one of the most significant roles in customer retention.
Business leaders in other industries often think of their marketing personnel as the “top-of-funnel” folks primarily responsible for attracting new customers and setting brand expectations.
However, as the ambassadors of a brand and lead generators—marketers have a deep understanding of customer’s needs, a keen ability to develop messaging and content, and the skills to form relationships.
Leveraging these skillsets holistically throughout the customer journey has contributed to enormous growth and success for numerous organizations. And these practices even contributed to the creation of an entirely new methodology for marketing…
Perhaps you’ve heard of Inbound Marketing?
Inbound marketing enables organizations to effectively generate leads, empower customer-facing teams, and increase customer retention—simultaneously.
If you haven’t started using inbound marketing or extended these strategies across your entire customer lifecycle—you’re behind the curve.
What is Inbound Marketing?
I won’t dive too deeply into inbound marketing. We already have a comprehensive guide on the subject.
At a high level, inbound marketing revolves around the idea that marketing teams can create valuable, meaningful, and engaging interactions by focusing on generating and sharing knowledge.
Sharing valuable insights and resources, for free, draws in prospects as they search for solutions to challenges in their lives. When prospects find you, instead of being distracted and bombarded by your ads and outreach, they willingly engage with your messaging and value.
Leads generated in this way are more engaged and have higher intent than leads generated from traditional broadcast marketing methods.
What’s more, the educational content created to attract prospects easily converts into resources that support the entire customer journey.
Educational resources can:
- Nurture prospects and shorten sales cycles.
- Support customer onboarding and increase adoption.
- Enable customer self-help and lower cost-to-serve.
Inbound marketing is a holistic marketing approach to the entire customer lifecycle and it generates organic, sustainable, and compounding growth.
Inbound Marketing Strategies that Increase Customer Retention
So how exactly can marketing help maintain customer relationships and increase loyalty?
By leveraging their knowledge of customer challenges, messaging, and content creation—marketing teams can support customers through initial onboarding, product/service adoption, support, and expansion of use. These efforts can reduce the burden on support teams, empower customers, and even nurture future sales.
Without further ado, here are some tactics and ideas on how marketing can increase customer loyalty.
Customer Portals and Knowledge Bases
With help from support teams, inbound marketing teams can develop and curate knowledge bases for existing and new customers. A robust knowledge base showcases expertise to prospects while enabling your customers to self-service. In addition, providing educational resources, answering questions, and demonstrating use-cases enable your customers to adopt solutions and overcome challenges with fewer high-cost engagements.
Knowledge repositories also provide valuable insights into when a customer is struggling, expanding their utilization, or successfully adopting a platform. These become powerful signals on when a customer may leave, need support, or be in the market for additional features (leads).
Easy-to-use self-service resources provide deep convenience that delights customers while lowering cost-to-serve. Better customer experience for less cost—imagine that.
89% of millennials use a search engine to find answers before making a call to get customer service.” (source)
Nurturing and Thought Leadership Newsletters
Converted customers still need nurturing. Once you’ve earned a new customer—it’s your obligation to help them succeed and keep them happy if you want to retain them.
Newsletters and email campaigns provide opportunities for you to showcase your knowledge and expertise, share your thought leadership, present case studies, and broadcast success stories from your other customers.
Provided you don’t just shamelessly self-promote and push sales emails—newsletters can help foster engagement and support your customers in adopting and expanding their use of your solutions.
When communications focus on more than extracting value and generating sales, they become a powerful tool to promote engagement and build community.
Resources and Automation for Customer Onboarding
If your customer onboarding relies on manual emails and handoffs between teams, you’re leaving each customer’s success to chance.
There is no other point in the customer journey where customers are more discerning, engaged, and vulnerable to leaving than during onboarding. It’s the first interaction between a business and a converted customer, and it sets the tone for the entirety of the relationship.
Bringing your customers into the fold, teaching them how to succeed, and supporting them along the journey is paramount to customer retention. Leveraging marketing skills to automate engagements, create and share walkthroughs and guides, and streamline communications is invaluable during this period.
What’s more, involving marketing in this customer stage creates a consistent brand experience from prospect to customer. It’s unenjoyable to wined and dined and then after you pay you are dropped into a utilitarian experience in which you feel uncared for.
Learning Management Systems (LMS) for Customer Adoption and Expansion
The faster your customers adopt systems and achieve results, the more likely they are to stay customers. The easier you make it for a customer to learn and use your system, the more willing they’ll integrate it into their lives.
Leveraging marketing skillsets to curate highly engaging educational content for LMS systems provides customers with on-demand learning and support. As a result, these systems increase adoption, expand usage, lower the cost of service, and expedite onboarding. As an added benefit, they enable your customers to gracefully manage employee turnover and turn end-users into super users that go on to demand your solutions wherever they work.
Taken a step further, education hubs become great launch pads for webinars, guest speakers, and community engagement seminars.
A well-curated education center is a competitive advantage that reduces the time to profitability for SaaS businesses and increases word-of-mouth marketing—and any business can use these strategies.
Set Up Listening Posts
To keep customers, you must know what makes them happy and when friction introduces itself into the relationship. By implementing the inbound marketing strategies in this blog, you’ll generate various customer touchpoints and opportunities to nurture constant communication with your customers. Each of these interactions is another opportunity to solicit feedback and identify where customers are struggling or succeeding.
Gathering customer feedback is a balancing act of when, how, and what to ask. Your communications team is uniquely qualified to find this balance and create surveys that are engaging and conversational.
Some examples of great listening posts include:
- Direct communications like phone calls, emails, and support requests
- Website comments and contact forms
- Social media engagement
- Customer satisfaction surveys
Customer Retention is growth
Boldly stated, if you have a SaaS business or see the value in having an engaged and loyal customer base—you should be investing in inbound marketing. It is an effective strategy for generating awareness and high intent leads while also helping to reduce customer churn rate.
This isn’t to say that marketing is solely responsible for the success of a subscription business—it does take a village. However, when knowledge empowers the entire customer journey, marketing can pull on the levers of profitability while supporting your other customer teams.
If you are looking to increase customer retention and acquisition while simultaneously lowering costs, leveraging your marketing team across the customer journey is a wildly successful place to start.
For further insights on the value of inbound marketing, schedule a free consultation below.
We enjoy learning about new businesses and sharing our thoughts on inbound marketing. We don’t believe in sales pitches or pushing services, so don’t worry, it isn’t one of those time-share deals. Instead, we will provide valuable insights for free.