Sales strategy for most companies usually revolves around tactics like cold calling, prospecting, and lead nurturing. How do you keep hold of them after you’ve closed the deal, signed the contract, and handed over the new client to the onboarding team?
If you’re in the SaaS industry, chances are many of your clients are industry experts in their own respect and can help you get more clients in the future. Doesn’t that make your job slightly easier than searching for new customers?
So, lift your foot off the gas pedal, take it slow, and let’s dive into some ways to keep your buyers coming back.
What is customer retention?
Customer retention refers to a range of tactics and activities performed to enhance the loyalty of customers, increase the number of recurring purchases, and boost the lifetime value of existing customers.
You worked hard on acquiring these customers; sent innumerable cold emails, got on those extra-long pitching calls, and closed the deal. Now, you need to find a way to hold on to them.
That’s where an effective and well-rounded customer retention strategy becomes critical.
As a sales representative, you’re a customer’s first point of contact and represent your company’s brand in effect. Once they are in your CRM, you have an advantage in helping nurture a relationship where you can extract optimum value out of them.
Some brands devote a large chunk of their budget to building a retention strategy while others allocate minimal resources. How do you determine how much effort you should be putting in?
Why is customer retention important for your business?
Depending on what business growth stage you’re at, the number of resources you should be putting aside for a solid customer retention strategy varies widely.
A well-established business should pay attention to how they are treating their existing customers and maybe put 40% of resources towards acquisition.
Customer retention is vital to your business because we live in a rapidly evolving world.
A SaaS company will continue to innovate and release new features and lines of products to keep up with the competition. An announcement email talking about new features won’t cut it anymore. In a digitally-enabled world, people are always passively shopping for exciting new brands. If you’re not courting your existing customers as persistently as new ones, you might lose out to those who do.
Here are a few reasons why customer retention pays off in the long run:
1. Brings in more revenue
While you might be familiar with the old adage that it’s significantly more expensive to acquire new customers, a new report says that U.S.-based companies will lose close to $136 billion per year due to avoidable brand switching. This means your sales team can save money and generate more revenue by increasing their customer retention rate.
When you focus on selling to the right customer, as a sales professional, you boost your chances to earn a higher commission on each sale and save yourself from a clawback.
Larger companies like HubSpot, for example, have a four-month claw-back period. If you lose a customer within one to four of signing up, the sales representative who sold to that client needs to pay back their commission payment.
2. Increases customer loyalty
Do you know what’s attractive about putting in the effort to retain customers? They’ll love your brand!
Expanding access to information and customer service support, say 55% of consumers in a survey, can make them fall in love with a brand. Loyal customers will often spend more with your brand than new customers. Once they have fallen in love with your brand, it’s easier for them to loosen purse strings to try out your new offerings, boosting sales.
3. Grow your referrals
Positive word of mouth is supremely powerful. A delightful customer experience means a customer is more likely to speak about it with their family and friends, which can help lift your referral rate.
Imagine you’re in the SaaS industry pitching a social media management tool. If you sell to a customer who’s a highly qualified lead in the sense that they are well-connected to other industry experts, you will end up generating some valuable referrals.
Rethink about the ways you’re nurturing relationships with high-quality leads and watch your referral rate slowly grow. They are highly effective in expanding customer base and come with a relatively lower cost-per-lead, say compared to acquiring new customers.
Tip: There are many things involved in launching a referral program that has a high adoption rate. Determining which referral program is the right fit for you is the first step.
Customer retention strategies for sales reps
1. Know your customers
The key to boosting customer retention rate is to sell to the right customer. To do this, you need to identify your ideal customer by performing a thorough target market research before you even begin prospect outreach.
If you’re unsure about who’s your target market, peek into the client roster of your industry competitors. Who are they targeting? What is their client base composed of? What does your buyer persona look like?
Here’s an example of one such persona for an ecommerce brand:
If you’ve been in the industry for more than a couple of years, analyze your existing customer base and identify parameters that can help determine who’s going to be your next customer.
Knowing your customers will also enable you to upsell and cross-sell other allied products and services to them. Someone who’s interested in and trusts your brand will be more likely to want to get all their business needs met right there with you.
2. Avoid overpromising and be realistic
Old school wisdom advised sales professionals to underpromise and overdeliver. That way, a salesperson emerges looking good out of a deal.
In the information age, this doesn’t hold water.
People are empowered with research. They can look up reviews, perform a comparison review, measure your brand up using their network, all within a day.
You can’t win by overselling your product and hope to increase customer retention.
Nothing bugs people more than a broken promise.
Did you say you’ll send a follow-up email the next week after your initial meeting? Then make time to send it next week. If your calendar is choc-a-bloc with client pitches, you won’t find time to follow up until much later. Empower them to book an appointment with you using the several online scheduling tools available.
CRM tools have a fundamental feature where you can personalize templates to clients and all you need to do is input the deployment schedule and client details. With a multitude of tech tools available, delivering on promises is more automated than ever.
3. Start a customer loyalty program
Who doesn’t yearn to be appreciated and loved? When put in the effort to stick with one brand because you simply love the service, you’d want to be treated special too as a customer.
That’s where customer loyalty programs shine.
Loyal customers are likely to spend 60% more per purchase than any other type. They are also the first group of people to become de facto brand ambassadors, spreading positive word of mouth about your brand.
Sales teams are critical at this stage to ensure customer loyalty programs are being adopted and utilized to the fullest by existing customers. If they don’t know a program exists, you’ll end up losing sales revenue in the long run.
Loyal customers are also more likely to provide feedback that can help improve your line of services and products. A well-designed customer feedback survey can help them voice their concerns, needs and find areas where they need immediate support.
You can filter incoming requests by customer lifetime value and automatically escalate critical cases from high-value customers. An effective customer loyalty program can help your sales team judiciously distribute attention to those clients who are bringing the most value.
Are you wondering what kind of loyalty program you should launch? Yes, there’s more than one type! Amazon Prime is a popular example of a paid loyalty program, while Starbucks Rewards is a well-known hybrid points-based and free perks loyalty program.
4. Make your customers feel valued
Now that we know how important are customer loyalty programs in making customers feel valued, what are some other ways you can do so if you’re not at that point yet?
How do you make customers feel appreciated? See a few tips below:
Personalized notes: Send personalized or handwritten notes to show your appreciation. Include a personal anecdote or something humorous about the purchase. For example, a skincare brand could say something cheeky like, ‘Bags look great as an accessory, not under eyes. This eye cream will ensure the only bag you have is on hanging on your arm.”
Regular check-ins: Schedule regular 15-30 min check-in meetings with high-value clients to provide them dedicated one-on-one time where they can air their concerns, ask questions, and share direct feedback. This way, your sales team can get ahead of situations and control the outcome as much as possible.
Swag bags: Did you hit a milestone? Share the win with your clients by sending swag bags. They most likely help you get there! Add in unique branded items that closely resonate with your organizational culture and style. Mugs and planners are passe. Think tech accessories like a wireless mouse, phone covers, pop-sockets, cushion covers, etc.
Social recognition: Are you embarking on a new client partnership? Announce it on your LinkedIn page. Recognize them in a social media post to show your excitement about kicking off a new partnership, what it means to your brand, and how it demonstrates your values.
5. Offer a discount or credit to return
What do you do when a customer has an unpleasant service experience? Maybe your service team is stretched to capacity and didn’t respond in committed service delivery time. It’s the post-holiday season and people have questions!
In a time like this, the sales team can perform damage control by offering customers a discount on their next purchase. For example, if their order is taking too long to deliver, put them on an email flow triggered due to unusually long service times. Instacart – a grocery delivery app - offers $10 off on next purchases to those who had less than satisfactory experience.
Tip: Craft an offer message they can’t resist checking out. Push abandoned cart notifications are a proven way to catch a customer’s attention.
Was a customer dissatisfied with your product?
Send them a return credit and cross-sell other products offered by you to keep them in your store cycle. Customers will feel valued and heard when a brand acknowledges and responds thoughtfully to their concerns.
All brands make mistakes and customers get it. Thoughtfulness goes a long way in remedying the consequences.
Many online store builders offer plug-in integrations with the help of which you can schedule discount coupons, shipping coupons, BOGO offers, and so on.
Customer retention goes beyond sending emails
The key ingredient in the recipe to keep your customers from leaving is the human aspect of it. Build customer relationships rooted in connection and thoughtfulness.
Make time to book one on one meetings with your clients where they can openly share their feedback and appreciation for your brand. Pay attention to tiny details like sending thank you notes, involve them in your successes, and most of all, set realistic expectations right at the beginning.
Learn how GetFeedback can help you exceed customers’ expectations—start your free trial today.
About the guest author
Mark Quadros is a SaaS content marketer that helps brands create and distribute rad content. On a similar note, Mark loves content and contributes to several authoritative blogs like HubSpot, CoSchedule, Foundr, etc. Connect with him via LinkedIn or Twitter.