In this episode, we discussed:
- Why businesses should focus on retention more than acquisition
- How that impacts the customer journey
- Why “zero paid media” should be the new marketing model
- The importance of connecting startups with established brands
Below are some of the highlights from our conversation.*
Focus on your repeat, returning, and recurring customers.
“What percentage of your marketing dollars do you invest in recurring revenue contribution compared to of programs for first-time buyers? There is an obvious disconnect: the majority of our dollars come from current customers, and yet we take them for granted. We become complacent by wooing those new conversions and leads. There’s a legitimate business case behind treating customers better.”
Use existing customers to gain new ones.
“You can grow your business from the inside-out. How? Through advocacy, loyalty, referrals, and testimonials. You can even embed loyal customers and advocates into the R&D engine — the actual innovation engine or ecosystem of the company. It’s not just business sense; it’s common sense.”
So much of what we classify as retention is not.
“I use a Maslowian hierarchy to suggest there are your six levels of retention. The first three levels leave a lot to be desired. On the bottom is churn, countering churn and attrition. Then we move to competitive conquesting, then cross-sell and upsell. Those aren’t customer-centric. They’re corporate-centric — valuable to the company but not necessarily to the customer.”
True retention should be customer-centric.
“It’s only when you get into content creation, referrals, and formalizing and scaling advocacy (even embedding customer voice into the R&D engine or innovation ecosystem) that we accomplish true retention. It’s kind of a catch-22. We are focusing too many of our dollars on the wrong priority: the traditional funnel vs. the flipped funnel. Considering how little we spend on retention, I’m not even sure it’s correct to classify it as such.”
Look at your funnel as a bow-tie.
“When you put the traditional and flipped funnel together, you get a bow-tie. The bow-tie itself is not meant to be linear. It’s also a poorly-tied bow-tie, because as we get better at using existing customers to gain new ones, we’re going to spend more on retention than acquisition. This optimization favors customer retention as the new acquisition.
“From cold leads to warm leads to hot leads to third-degree burn leads, you have awareness, interest, desire, and action. Once you have a customer, on the other hand, you actually get to hear their voice. After the moment of conversion, there’s a constant iterative cycle, and we start to see the relationship yield increasing returns.”
I don’t think marketers focus enough on the journey.
“It’s the destination we’re so obsessed with. There’s that old truism, success is a journey, not a destination. We need to focus on the journey between point A and point B instead of trying to oversimplify it and lose sight of the means to that end. The end will take care of itself if we focus smartly on the means.
“The customer journey has so many unique components and moments of truth — from onboarding a B2B product, through usage milestones, anniversaries, and of course when things go wrong. In the flipped funnel, I have this process I call ‘ADIA’ that stands for Acknowledgement, Dialogue, Incentivization, and Activation. Those are four different components that should be factored into the journey. Businesses need to have real conversations with their customers.”
People don’t care about how much you know until they know how much you care.
“Human-to-human and customer-to-customer conversations are so important. They go beyond the you-only-call-me-when-you-need-something-or-have-something-to-sell dynamic. A relationship is so much more than that.”
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B2B Nation: Smarketing is a podcast for B2B sales and marketers, featuring expert opinions and advice on the most important topics in the industry. Check out our other episodes on iTunes, or follow on Twitter: @B2BNation_Smar. If you enjoyed this post and episode there is a special bonus episode with Joseph Jaffe as a prize for reading this far. Enjoy!