Message for Marketers: Always Be Engaging

In sales, we know customer retention is critical for success in the subscription economy. For many tech companies in the SaaS space, it takes three years to break even. In insurance, which has toiled in the subscription economy for more than a century, the average break-even time is an incredible seven years.

Because of that, sales compensation is starting to change. Some companies are altering their comp plans to reward sales reps for behaviors during the initial deals that set up follow-on sales. Reps who set the stage for continued engagement with the customer are rewarded better than reps who merely get a signature on a contract.

This parallels a trend in how sales managers are being evaluated: Profitability — not gross revenue — is growing fastest in importance as a measurement of success. Team profitability zoomed in terms of how much weight it was given in manager promotions, from 14 percent to 24 percent, according to a recent study by the Sales Management Association.

Keep Your Customers Close

Smart businesses are looking at profitability over long customer lifespans. The focus has not shifted entirely — the emphasis in most companies is still strongly tilted toward revenue and new customer acquisition. However, it’s clear a shift has started.

Without adjustments from marketing, this shift puts sales ahead of marketing in the innovation game. Marketers remain focused on acquisition, and little of their energy is devoted to existing customers. Yet if sales and marketing are focused on the same goals — profitability, low churn and low customer lifespans — then marketing will have to shift in tandem with sales.

That requires marketers to abandon the idea that their efforts to communicate with prospects stop (or even greatly diminish) after they become customers. The next generation of marketers needs to keep adding value to the relationship on an ongoing basis. The initial deal is all about the sale, but the deals after that are all about engagement — and you can’t do that if you curtail your conversation with the customer.

Marketers must market to their customer bases with the same enthusiasm they use to market to prospects — but with certain differences. Essentially, they must build parallel programs, segmenting customers and delivering value and content suited to each segment just as they do to prospects. How do you do this well?

First, be a continuous consultant — not in a professional services sort of way, but in the manner of a friendly advisor who periodically offers recommendations about adoption, forgotten features, and other ways to maximize customers’ investments in your products or services.

Simple emails with user tips are an effective way to do this, especially when you can identify roles at your customer company, and deliver valuable suggestions personalized to each role. Use your marketing automation application just as you’d use it to reach prospects — and be sure to include calls to action to further engage the customer.

Don’t make the mistake of failing to continue lead scoring for existing customers. Secondary thresholds after the initial purchase can help you signal your sales team when it’s time to return to their customers with new offers, as well as more finely targeted offers.

What Works Best?

If you’re selling through a subscription model — especially if SaaS software is your product — you have an unprecedented ability to understand usage. Take advantage of it. If you detect a product is being used — or not used — in a way that suggests an adoption problem, offer content, and even services, that will get customers back in front of your product. You also can use this data to understand how customers are expanding their use of your product, and tailor content based on each customer’s usage.

Usage analysis is good, but it doesn’t mean you shouldn’t also seek feedback directly from customers. Some form of feedback mechanism — a survey, a community, or just a process for recording and acting on customer communications via email, phone or text — is extremely helpful. It can help you spot customers on the verge of churning, understand better why churn happens, and give customers a direct way to have influence on the direction of your products.

As in any marketing campaign, verify the effectiveness of your tactics through analytics. You can correlate your efforts against churn to spot what isn’t working — but be sure to correlate them against continuing sales over time to understand what works, and what works best.

If you’re fighting the internal battle for marketing budget — and who isn’t — this is an invaluable exercise. If your program really works, churn will go down, and profitability will go up.

Finally, get creative about how you engage with customers. Events, contests, communities, and even in-person visits should be considered part of your program. It is much harder to end a relationship with a company you interact with regularly than it is to bail on a company that barely interacts with you at all — so make sure you hold up your end of the relationship.

If you want to keep boosting your revenues, follow the admonition of Alec Baldwin’s character in Glengarry Glen Ross to “always be closing.”

If you’re in marketing, and you want to achieve two more modern and more lucrative objectives — longer customer lifespans and greater profitability — perhaps you should “always be engaging” instead.

CRM Buyer columnist Chris Bucholtz is content marketing manager for CallidusCloud and a speaker, writer and consultant on topics surrounding buyer-seller relationships. He has been a technology journalist for 17 years, focusing on CRM since 2006. When he's not wearing his business and technology geek hat, he's wearing his airplane geek hat; he's written three books on World War II aviation.

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