In August of 2020, McKinsey polled B2B sales teams about how their COVID-19 digital pivot had impacted their ability to sell to existing customers. A whopping 75% of respondents said that they were just as effective at selling to trusted customers, or even more so, than before the pandemic hit.
Why is that?
In the same study, MicKinsey found that up to 80% of B2B decision makers already preferred to do business online before the pandemic began. If customer experience is about anything, it’s about giving customers the feeling that they’re valued and that they’re listened to. More on that later, but for now, I’ll take this as some pretty good evidence that when you give people the chance to do business the way they want, they’ll be more willing to, you know, do business with you. And making people interested in doing business with you long-term is what customer retention is all about.
The pandemic has made it clear that customer retention is the most effective way to grow your company. Here’s why—and what it looks like when businesses focus on nurturing different types of brand loyalty.
Why Does Customer Retention Matter?
Companies aligned for growth get laser focused on understanding customer turnover—not just because it’s expensive, but because it’s preventable.
Customers churn for one of three reasons:
- Customers don’t feel valued by your company.
- Your team hasn’t been given the purpose behind your work.
- Your company hasn’t successfully implemented processes to deliver a stellar customer experience.
If your product or service doesn’t deliver what you promise, customers are going to feel suckered – and they’ll leave. If you want employees to get excited about your initiatives but haven’t shared why they’re vital, employees aren’t going to buy into the work. If customers can’t rely on your team for a roadmap to success, customers will be annoyed, then angry, and ultimately absent.
As a leader, customer retention is your responsibility. Here’s the good news – the solution is simple.
Fixing The Foundation
I have helped companies improve customer retention for 20 years. I guide companies in technology, retail, healthcare, financial services, media and more. In all of those cases, the formula for success boils down to the same factors:
- Industries have distinct challenges.
- Companies are unique.
- Individuals see the world through their singular lens.
- Humans have a fundamental need to feel seen, heard, and valued.
Customer retention, at its core, is a proven formula to build trust with every interaction, so people feel valued throughout their relationship with your company.
“The more trust consumers feel toward your brand today, the more willing they are to believe that your brand will put them first, even after the COVID-19 crisis passes,” says Forrester Senior Analyst Anjali Lai.
These are extraordinary times. We are all still learning new ways of dealing with our worlds. But the essential, human need to feel valued hasn’t gone anywhere.
According to Deloitte, “at times like these, every interaction with your customers and partners is an opportunity to demonstrate what your organization is all about, and to be true to your brand and your purpose.”
That means focusing on customer loyalty in marketing, sales, delivery, and customer service.
Customer Retention Examples
Even with everything I’ve already discussed in this article, you still might be asking yourself a basic question: “Are customer loyalty programs worth it?” The answer to this question on its simplest level is “Yes!” but a more comprehensive response will vary from business to business.
When B2C brands think about loyalty programs, they conjure images of punch cards and rewards points. B2B brands will have a different approach to increasing customer retention. The beating heart of any loyalty program is to make good on promises and ensure customers are heard, valued, and respected.
With that in mind, let’s take a look at three case studies that show what customer retention looks like in action.
Case Study #1: ClusterTruck
When Chris Baggot, co-founder of ExactTarget, turned his attention to the prepared food delivery market, he was surprised to find that people really wanted food on demand, but they hated the existing tools. As he built the company that became ClusterTruck, he knew that he had to be better than the competition at controlling every aspect of the customer experience. Where competitors were little more than tech companies, ClusterTruck would need to be a tech company, a restaurant, and a delivery service wrapped up into one.
By hiring their own delivery drivers, preparing all of their food from scratch in kitchens owned by the company, and building their own tech for users to order with, ClusterTruck made it possible to guarantee quality at every level. Their guiding mantra became “Don’t ship maybes,” and that’s not just dishes that aren’t up to snuff—it’s choosing the right food vendors, hiring the right people, and shipping the right digital products to consumers.
Where other food delivery services often leave customers with late deliveries of cold food, ClusterTruck has engineered every aspect of their operations to give customers what they want—and they’re always learning from customer buying trends to improve their offerings.
Now, ClusterTruck outperforms other restaurants consistently, and Chris Baggot has “Don’t Ship Maybes” tattooed on his arm. If that’s not dedication to customer retention, I don’t know what is.
Case Study #2: UrbanStems
Food isn’t the only commodity that has a troubled history with delivery. The country’s top flower delivery companies have a less than stellar reputation among customers for a bevy of reasons, from poor communication, hidden fees, lost orders, and flowers that show up looking less lively than a customer had hoped.
For Ajay Kori and Jeff Sheely, co-founders of flower delivery service UrbanStems, this created an opportunity to simply be better. By focusing on hiring empathetic employees who would put customer happiness above else, they’ve created a company culture that stays focused on the real purpose of flower delivery: brightening peoples’ days.
To keep customers loyal, that means giving a great purchase experience—but the real customer retention work happens when something goes wrong. Flowers are delicate, living things after all; there’s a ton of room for mishap from greenhouse to final delivery. UrbanStems has gone as far as naming their customer service team their “customer happiness” team, and that makes all the difference when an angry customer calls with a complaint. When met with someone on the other end who cares enough to make a problem right—and is empowered to do so—it’s almost unexpected compared to past experiences customers have with other floral companies.
The next time that once-angry customer wants to send someone flowers, who do you think they’re going to call?
Case Study #3: PERQ
PERQ is a marketing technology company that sells high-level consumer engagement for complex purchases, such as apartments and cars. For co-founders Andy Medley and Scott Hill, business is a game to be won—and they’ve made “the game of business” their guiding mantra, or bullseye, that informs their entire culture.
By setting clear goals and expectations and challenging their team to compete—and have fun playing the game in the process—PERQ has empowered employees to truly own the company’s vision and do incredible work. As teams work together to win that game together, they’re incentivized with half-days off and other, erm, perks that generate significant buy-in from employees.
In turn, that respect translates to customers, who have become fervent fans of the PERQ brand and helped the company explode with growth. With this approach, they’ve increased their cumulative annual growth rate by 900%—thanks in no small part to great customer retention.
Step Up YOUR Customer Retention with Alignmint Growth Strategies
You have an opportunity to build a customer relationship for long-term, lucrative loyalty. If you want a guided process through the formula for customer retention, this is your moment. Don’t waste another day or churn another customer.
Align your company for success.
Most of all, start. I’m offering online courses to get you where you want to be.