It’s time for marketers to give customer retention a little love.
According to the State of B2B Product Marketing 2015 report by Regalix Research, customer retention marketing comes in dead last in the list of B2B marketing activities. Only about one in four B2B marketers plan for customer retention.
Optimists like myself see this situation as a tremendous opportunity. Getting serious about customer retention marketing gives you the chance to jump ahead of your competitors and earn lasting loyalty from customers.
If customer retention marketing interests you, I’d invite you to join me in a webinar on May 13th titled Creative Approaches to Customer Retention Marketing. You can register for it here.
This will be the first in a series of webinars hosted by Totango with the speakers from its recent Customer Success Summit.
And if you have any creative customer retention strategies to share with me ahead of the webinar, get in touch. I’m always looking for more inspiring examples.
In the subscription economy, marketers must dedicate time and energy to nurturing their current customers.
If you sell using a subscription model, then your future revenues depend heavily on the success and loyalty of your current customers. The potential payback for marketing to those customers is huge.
It sounds both simple and obvious. Yet in many businesses, marketing practices remain unchanged while revenue models are shifting. Many marketers are so focused on generating leads that they don’t have cycles for their current customers. Some marketing teams abdicate responsibility for the customer relationship at the moment of the sale.
The shift in revenue models requires a corresponding shift in marketing practices. Let’s look at how traditional, established marketing practices need to adjust as businesses shift to subscriptions:
These new practices span a wide range of marketing activities, from helping customers achieve success quickly to adding value outside of the solution itself. I’d suggest that they can be grouped together in an umbrella marketing category called Value Nurturing. Put simply:
Customer value nurturing is the practice of helping the customer realize value from your solution.
Value nurturing is the next logical step after lead nurturing:
I’ll be blogging more about value nurturing strategies in the weeks and months to come. My book on Subscription Marketing discusses strategies for value nurturing in detail. If you’re interested in exploring these topics with me, be sure to sign up for my email list.
Image: Paweł Bukowski on StockSnapIO
“It’s time to move the discussion away from today’s latest hot marketing tools and tactics to what really counts: convincing customers to trust you with their business – not just once, but time and time again.”
That’s the voice of reason. More specifically it’s the voice of Linda Popky’s new book, Marketing Above the Noise. Linda makes that statement in the introduction, and proceeds to back it up in the pages that follow with detailed, common sense marketing wisdom based on experience. Well-thought-out examples illustrate every point.
In an age of growth-hacking, social media, SEO-optimization, gamification, and the marketing mantra of the week, how wonderful to put the fundamentals of marketing into perspective. (See this mind-boggling infographic about the marketing technology landscape from the Chief Marketing Technologist blog.) Nearly every day we face a new technology, channel or strategy.
Linda lays out the marketing fundamentals in her Dynamic Market Leverage Model. The model is a way of stepping through the fundamental tenets of successful marketing strategy and execution.
Customer Marketing (Value Nurturing) Is Part of the Strategy
Linda also touches on the topic that is near my own heart recently, which is marketing to your existing customers. Her words on this: “Your marketing should reinforce the wisdom of the customer’s choice.”
Overall, this is a comprehensive tour of effective marketing practices, incorporating the latest trends but not letting them distract the reader from long-term objectives. I’d highly recommend the book to anyone either starting anew in the field or ready to take their own practices to the next level. Marketers of all levels can find inspiration and guidance here.
Question of the day: Are memberships one variation of the Subscription Economy (as suggested in John Warrillow’s The Automatic Customer, which I reviewed here)? Or are we really experiencing the growth of a Membership Economy, for which subscriptions are merely one revenue model?
Which is a subset of which? Or does the reality look something like this instead?
The question arises after reading Robbie Kellman Baxter’s book The Membership Economy. The book takes the position that subscriptions are one revenue model within the broader Membership Economy.
The terms Membership Economy and Subscription Economy are different filters into the same set of trends and businesses. When you’re looking at these trends from a revenue perspective, you’re likely to think about subscriptions. If you focus on human behavior, as this book does, membership is a more interesting angle.
Here’s a quote from this discussion in the book:
“What makes a membership organization is the attitude of the organization and the feelings of its members—not whether members subscribe. Companies’ failure to see themselves as part of this bigger trend can limit their potential to build relationships and strengthen their models.” (Robbie Kellman Baxter, The Membership Economy.)
My own book (Subscription Marketing) speaks of the Subscription Economy, but I love the emphasis on human relationships that is inherent in the term Membership Economy.
Enough about terminology, let’s get to the book.
In The Membership Economy, Robbie shares her insider’s perspective into the challenges and opportunities of building a membership-based business. After the necessary discussion of terminology and trends, she dives into seven key strategies and tactics for membership businesses, including onboarding, pricing and technology. I’m particularly interested in the customer retention strategies. I love that in addition to retention, she stresses the importance of letting customers go gracefully.
The third section of the book digs deeper into different types of subscription companies (online communities, online subscriptions, loyalty programs, etc.), with case studies of each. The fourth section offers guidance on making the transition to one of these models within your own business.
The book is well written and engaging, with interesting stories and examples. If you’re considering making a transition and want a thoughtful discussion on topics such as the uses of freemium or risks of different pricing models, this is a terrific resource.
If there’s a fan club for Robbie Kellman Baxter, I’ll be a member.
And if you’re interested in this topic, sign up for my monthly newsletter, exploring the subject of marketing for businesses with recurring customers.
Have you ever heard of the Blue Car Syndrome? It’s the non-scientific name for what happens when you buy a blue car, then start seeing blue cars everywhere. I’ve been experiencing the effect lately when it comes to subscription businesses.
While working on a book about the implications of subscription models on marketing, I started seeing subscriptions everywhere. My Safeway club card? That’s a subscription paid with data. Amazon Prime? Subscription. Insurance policies? Check. The more I thought about them, the more variations I found on the subscription model.
John Warrillow has done the work of describing, labeling and analyzing those different models in his new book The Automatic Customer: Creating a Subscription Business in Any Industry.
The book identifies and labels nine distinct variations on the business model.
The book discusses the differences in these variations, as well as their fit for different industries and businesses. It does a great job of describing the overall benefits of a subscription model. Warrillow clearly explains the revenue metrics that businesses should track in a recurring revenue environment.
I loved learning about new subscription businesses I hadn’t encountered in my own searches, including Standard Cocoa and Conscious Box.
Key takeaway: If you’re not sure about how a subscription model might fit in your business, or if you’re starting up a new business and debating revenue models, this is your go-to resource.
What do socks, industrial chemicals, and Emmy-award winning television programming have in common?
They’re all available by subscription. Foot Cardigan (among several subscription sock contenders), Dow Chemical, and Netflix are all rocking the subscription model.
Subscriptions are working their way into many industries as businesses realize the financial benefits of recurring revenue streams. Some subscriptions replace traditional business models, such as cloud computing eating into packaged software sales. Subscriptions also complement or enhance existing models. Amazon Prime is highly effective at increasing traditional sales on Amazon.
Subscriptions change how and when people buy from a business. The subscription customer must decide, repeatedly, to remain a customer. Revenues come not from the one-time sale, but from the ongoing loyalty of the customer. These facts have major implications for marketing.
Marketing in the Subscription Economy
Some marketing practices don’t work well in the subscription model and may need to be abandoned. For example:
More often, marketing organizations need to shift their focus from simply getting more leads to nurturing customers beyond the sale. If existing customers are responsible for most of your revenues going forward, then they should be a central to your marketing strategies.
Value: The Key to Long-Term Relationships
You’re only getting started marketing when the subscription customer signs up.
Before the sale, the marketing organization sets customer expectations for the value that they will achieve through a subscription. It only makes sense that marketing be responsible for following through on those expectations.
Beyond generating and nurturing leads, marketers need to devote efforts to nurturing existing customers. And the best strategy for keeping customers loyal is to help them realize value in being a customer.
Value is a complex concept; marketers can nurture customer value in many ways.
For example, help customers to be successful with your solution. Technology marketers might work with customer success teams and others to get customers using the subscription right away. Marketing might create videos that help new customers learn to use the solution.
Or you can help customers understand the value they get from the subscription, often by doing the math for them. Tell them how many dollars they have saved or reports they have run. You may have data to help quantify the actual value.
Another approach is to add value outside the solution itself. Marketing organizations can do this by creating communities and sharing content. They can add value to the customer relationship, using advocacy programs and customer collaboration to bring customers closer.
Finally – and this is a powerful strategy – subscription businesses can align with their customers’ deeper values. If your business has a compelling story and is committed to its values, you can earn a closer relationship with like-minded customers.
Interested in Subscription Marketing Strategies?
What better way to explore subscription marketing than through a subscription? Subscribe to my monthly newsletter on the topic. Sign up here.
Or, if you want to dive a little deeper into the marketing strategies, check out my book, Subscription Marketing: Strategies for Nurturing Customers in a World of Churn.
Photo credit: Zak Suhar, from stocksnap.io
Subscriptions aren’t just for magazines anymore. Technology companies, retail businesses, industrial services and suppliers, and countless other companies rely on subscriptions to sell goods and services to customers.
Think about it: Amazon AWS is a technology subscription, while Amazon Prime is a content and services subscription that drives retail sales.
If any part of your business relies on returning and renewing customers, you’re in the subscription business. Because business success depends on a long-term relationship with the customer, marketing needs to focus on current customers as well as prospects.
In the subscription business, marketing cannot stop at the point of the sale.
There’s a new book on this topic called Subscription Marketing: Strategies for Nurturing Customers in a World of Churn. I’d review it here, but modesty prevents me, as I wrote it. (Yes, that’s why the blog posts have been sparse lately.)
Instead, you’ll have to read the reviews on Amazon.
For those who are interested in continuing the discussion on this topic, I’ve started a Subscription Marketing newsletter to share resources on the topic. Don’t worry, it won’t flood your inbox because it only comes once a month. You can sign up here.
In this blog you will continue to find articles about technology marketing, content marketing, and subscription marketing (which all overlap), as well as reviews of useful books on marketing and technology. Thanks for reading!
If you’re in marketing, you’ve probably been influenced by David Meerman Scott’s New Rules of Marketing and PR. Originally published in 2006 (and updated several times since), it’s had a lasting impact on the practice of marketing.
Now he’s got a new book out, The New Rules of Sales and Service. Again, it’s a marketing must-read. Although I read last fall and included the book on my list of marketing books last month, I haven’t reviewed it here yet. Until now.
Although the title doesn’t say marketing, I’d suggest you put it on your reading list. Because sales and service interactions should be a continuation of marketing efforts and strategies.
Several of the new rules sound familiar to a marketing professional, but apply as well to sales and service organizations. For example:
Rule #1: “Authentic storytelling sets the tone.” Understanding the business story is critical for anyone engaging with the customer, including sales and service. If marketing is creating stories, we need to share them widely and build consensus throughout the customer-facing business.
Rule #2: “Content is the link between companies and customers.” Stop thinking of content marketing as simply a way to generate leads, and start thinking of it as a way to support and nurture your customers.
And another chapter heading reads: “We’re all in sales and service.” So true. The boundaries between marketing and the other parts of the business are blurring. Sales and service teams tend to own ongoing customer relationships, but that doesn’t mean that marketing’s job sends at the time of the sale.
This is particularly true in businesses that maintain a long-term relationship with the customer. Customer loyalty is the life blood of businesses with subscription-based business models. (That’s the topic of my latest focus, subscription marketing.)
The New Rules includes terrific examples, with instructions on topics such as interviewing customers to create buyer personas, engaging with customers in real time, and using great service to generate more leads.
To sum it up, again in David’s words: “Break down the walls between sales and marketing, and your business will improve.”