In the current, unpredictable economic landscape, one truth remains constant for B2B (business-to-business) enterprises: Customer retention is critical. The importance of retaining existing customers is greater than ever during a recessionary period.
Why: Because it costs five times more to acquire a new customer, than it does to retain an existing one. Moreover, the probability of selling to an existing customer is 60-70% more likely, while the likelihood of attracting a new prospect is between 5% and 20%. That said, customer retention in B2B markets presents unique challenges.
Unlike B2C (business-to-customer) relationships, B2B connections tend to be long-term. It involves complex, multi-layered interactions between the provider and multiple stakeholders within the customer organisation.
As these organisations evolve, their needs will change too, and sometimes dramatically. This dynamism can create gaps between what the supplier offers, and what the customer truly needs. This often leads to potential customer loss. And in a volatile economy, this gap can widen. Recessionary pressures often catalyse organisational changes, as businesses develop new strategies.
They may also need to adapt to shrinking budgets or to restructure their operations. If not addressed proactively, these changes can disrupt established B2B relationships which, in turn, reduce customer satisfaction and loyalty.
So, how can B2B sales and marketing professionals mitigate these challenges? And how can they leverage customer retention for competitive advantage, especially during a recession?
Understanding The Evolution Of Customer Needs
The key is to understand and respond accordingly to the evolution of customer needs. Each change within a customer organisation represents a shift in their requirements – which means a potential opportunity for the supplier.
If the supplier can identify these changes early, they can modify their operations to satisfy the customer’s evolving needs. This will demonstrate the supplier’s value and help to reinforce customer relationships.
However, detecting these changes can be challenging. Traditional customer interaction points, such as an annual review or quarterly meeting, may not provide early enough insight into the customer’s evolving requirements. Therefore, a more proactive approach is needed and one that provides real-time insights into the customer’s organisation.
Leveraging Data For Proactive Engagement
Advanced data analytics can offer such insights. By monitoring a wide array of data points, helps suppliers to identify patterns of significant change within the customer’s organisation. These data points can include statutory filings, changes in contact details or changes to personnel.
The sophisticated data analytics tool called Visible Client, created and powered by Corpdata, identifies such changes. This could involve strategic shifts, management changes, or operational transformations. Visible Client notifies you when you should be making the call.
Armed with this knowledge, the sales professional can reach out to the customer and engage them in conversation regarding any changes at the right time. This proactive engagement not only helps to retain customers but can also lead to upselling or cross-selling opportunities, to further enhance the customer’s value.
Turning Adversity Into Opportunity
In a recession, such proactive engagement can be a game-changer. As businesses look for ways to weather the economic storm, a supplier that understands their customers’ needs, are well placed to adapt their services. This will make the supplier an indispensable partner. By turning adversity into opportunity, this approach will enable B2B enterprises to not only retain customers but also to grow with them.
Growth = Retention + Acquisition
However, customer retention will not necessarily lead to growth on its own. Growth usually requires finding new customers. While cost pressures may make retention an attractive choice, an ambitious organisation will always be on the lookout for new customers or clients.
Using the most accurate, up-to-date, compliant data will deliver the best ROI (return on investment). Although customer retention in B2B markets is complex, it becomes significantly more manageable – and lucrative – if the supplier has a deep understanding of their customers’ changing needs.
In a recession, this approach can transform customer retention, while also driving business resilience and growth. This article comes courtesy of Corpdata, the UK’s leading provider of innovative data-drive B2B solutions.