For SaaS and subscription companies, winning a customer is only the first step of the journey to customer lifetime value (LTV). This is why it’s imperative for B2B tech marketers to shift their focus from buying journey funnels to full-on customer lifecycle management. However, customer acquisition is where most marketing strategies stop. The traditional funnel is focused on net-new customer acquisition as the means to drive growth. This singular focus is a double-edged sword in recurring revenue and subscription business models.
For example, if you lose five customers this month, you’d need to acquire six new customers in the same month to create growth. This may seem doable when a company is small, but as customer volume grows, so do those requirements just to maintain a consistency in monthly recurring revenues (MRR).
In this blog, I’ll cover best practices for B2B marketers to make the shift from funnels to lifecycles to increase ROI and help your customers stick with you for the long run.
Develop a Clear Customer Engagement Strategy
Opportunities for churn arise throughout the customer experience. The more engaged and invested your customers become, the “stickier” the relationship. Marketers must seamlessly extend the experience that engaged and converted customers on the front end to one that will engage and grow their loyalty and satisfaction on the back end. This is your opportunity to ensure that you’ve developed customer experiences that result in happy and productive customers.
Answering questions such as these can help you determine how to best engage your customers:
- What do new customers need to implement and become proficient at using our solution?
- Who are the new roles/people you need to engage?
- Are they achieving their desired outcome?
- How can you help them get more value?
- How easy is it to do business with you over time?
Onboarding is a critical stage for new customers. Buying a new product or solution is about change management. Sending a welcome email is great, but nowhere near enough. Implementing the product is one thing, driving user adoption is quite another.
What content, tools, or resources can you provide to generate excitement and anticipation for using your solution? Do you have programs to help power users bring along those that are more reluctant to embrace new ways of doing things? Your customers won’t continue to pay for shelfware. Marketers who proactively work to engage new customers by helping them facilitate change and see added value will help to increase retention.
Gaining the outcome promised during the buying process is the minimal viable return your customers will expect and demand. If the value your solution provides is not easily quantifiable, marketing can help to make it more tangible by showing customers how to validate it for other internal stakeholders. And, once that’s achieved, show them how they can gain even more value. This leads to expansion opportunities via cross- and up-sell potential. Creating a strong customer retention strategy doesn’t always mean focusing on getting more money, but can be just as effective when focused on getting more time. The longer a customer chooses to stay with you and use your products, the higher their lifetime value and the more profits for your company.
Expand Customer Relationships
It’s common that there’s a champion who has worked tirelessly to help their company buy your solution. Unfortunately, one of the most common reasons for churn in SaaS or subscription customers is the loss of that champion—whether through resignation or role reassignment.
Once a customer is acquired, the smartest thing marketers can do is to expand relationships within the account. This has become a driving principle for account-based marketing, but it’s an imperative for building customer relationships, as well. Similarly, if only one person at the company knows how to use your solution and he or she leaves, you’re left with an orphaned solution destined to become shelfware, which leads to a lost customer.
Expanding your reach within the account should be a component of your customer engagement strategy. You’ll need to work closely with your account managers or customer success teams to create this program, but the longevity of relationships that can be created by increasing the number of people who use and have knowledge of your product will pay off in longer-term, more profitable, and satisfied customers.
Expanding and deepening customer relationships also pays off in referrals and advocacy—two things that deliver big benefits for company growth.
Avoid Unpleasant Surprises at Renewal Time
When marketers focus on keeping customers for life, they are engaged with their customers continuously. Interactive content and personalization are two tactics that are high on marketers’ goals lists. Think about how customer retention programs that employ those tactics can also inform your customer acquisition strategies.
One of the biggest challenges marketers face is understanding their prospects and buyers and breaking through the noise to engage them. Getting proactively involved in customer retention and working collaboratively with sales and customer success teams will help to remove that blindness and replace it with relevance that enables even better marketing strategies for customer acquisition. This is truly the time for fearless marketers to go boldly beyond funnels to focus on customer lifecycle management.
Originally published on Marketo Blog
This is an interesting view, Ardath. I have seen this idea pop up in a few places recently. It does make sense to look at lifecycle management instead of the traditional funnel. After all, everything else about marketing and sales has evolved over the years, but the funnel remained.