Why Customer Retention Is So Important

Everyone who works in sales or marketing knows that it’s cheaper to retain an existing customer than to attract a new one. In fact, a?study?found that more than 80 percent of companies agree it is less expensive to keep the customers they have than to go out and find new ones.

Not only is retention cheaper than acquisition, it also carries the potential to have a much bigger impact on your bottom line. One oft-quoted?study ?has found that a 5 percent increase in retention can boost profits anywhere from 25 percent to 95 percent.

Despite these well-known facts, survey after survey finds that sales leaders are more focused on customer acquisition than on customer retention.

Getting new customers is kind of like buying a shiny new car. Sure, it’s more expensive than keeping the perfectly good old car running, but it’s NEW! It’s exciting! And we just really like it!

Now don’t worry—we’re not going to give you a hard time if you’ve recently purchased a brand new car. However, we are going to tell you that if you’re in B2B sales, you simply cannot afford to ignore customer retention.

B2B markets have four?key features that set them apart from B2C markets when it comes to customer retention:

1. You have a limited market for your products and services.?If you’re selling a B2B product, there just aren’t as many people who want to buy what you have to sell. We’ve seen some product segments where the total addressable market is just 100 companies. In these sorts of markets, if you lose one customer, it’s really hard to find another customer to replace it.

2. Deals tend to be worth more money.?Now, it isn’t true in all cases (so don’t send us hate mail if you sell paper clips), but most B2B products have a higher price tag than consumer products. That means that each customer likely represents a fairly high percentage of your total revenues. In some parts of the technology industry, for example, a single deal might be worth millions. If you lose one of those customers, that’s going to have a significant impact on your bottom line.

3. Deals take a long time to close.?No one buys a $100,000 piece of factory equipment on impulse. B2B salespeople are telling us that these days there are more people involved in the buying process than ever before, and getting deals to close takes a significant investment in terms of time and resources. New customers are becoming more expensive, and losing customers represents a larger loss in terms of the effort that went into landing those deals in the first place.

4. Few new customers are entering the market.?Again, there are some exceptions here, but in many industries new companies aren’t born every day. In fact, in some markets, you may have only one or two new entrants into a market in an entire year. So if you want to grow your business, you’re going to have to expand your wallet share with your existing customers.

While it might be more fun to chase after shiny new customers, you’re going to have to invest some time and money in customer retention if your B2B firm is going to survive and thrive.

Our mission here at the Predictable Success is to research and disseminate leading-edge practices and innovations in sales operations.

Predictable Success accesses a world wide community in which we bring together B2B sales professionals to help navigate a rapidly changing world by sharpening sales skills, enhancing?strategies and practices and providing a system for personal and professional growth so that sales people can make more money, be more respected,?be more recognized, and more influential.

So we’re always learning about different approaches, new technologies, changes in focus and priorities, what’s working well right now, what’s not panning out anymore, and so on.

Other people can teach you to sell.?We enable you to sell better!

These processes have worked with many of my clients for years and this systematic and disciplined approach has been a critical component to their success

The GOAL of every high-performance sales team should be to…… Proactively create the conditions where more deals, that are more profitable, with better customers, are the natural result.

This is achieved by engineering the overall sales process such that it reliably generates the desired outcomes as a matter of course.

Predictable Success can examine your sales processes and deliver an accurate road-map after determining where you’re on track and where you need a course correction and can provide a cost/benefit analysis and expert recommendations to improve your sales performance on every level.

Want help designing customised sales strategy road-map want to deliver predictability, consistency, revenue growth and sustainability to your sales operations, call for a chat on 0432 622 744 .