Five Best Practices to Create Customers for Life

by

James Huddleston

culled from:http://www.servicesource.com

Congratulations! Through blood, sweat, and maybe even a few tears, you’ve acquired a new customer. Chances are, you’ve invested a good amount of time and money to do so. What you may not realize is that on average, it takes just over three years to recoup the initial cost to acquire and get to profitability with that customer. This is especially true for SaaS, subscription and cloud-based businesses.
With this in mind, you’ll want to make sure you take good care of that customer, nurture the relationship and demonstrate your ongoing value. By developing an effective Customer Lifecycle Management strategy, you can create a happy and loyal customer, accelerate your time to profitability, and reap the high revenue potential from your existing customers.
Here are five best practices we’ve identified for growing customer lifetime value and keeping your customers longer:
1. Know your customers.
While it sounds simple, how many companies do a truly good job of understanding your challenges and needs? You should have an in-depth understanding of your customers — from industry trends, competitive offerings, business goals and challenges to the value they expect to receive from your product.
To get this insight, you need to integrate various silos of customer data while also ensuring your Customer Success and Account Management teams are capturing and recording qualitative information about your customers. For every ongoing interaction with your customers you should be asking key questions to help ensure you continue to deliver value, uncover opportunities, and prevent possible customer churn.
Most importantly, your CRM system must extend to support sales activities far beyond the initial customer purchase and provide valuable and actionable insight across the entire customer lifecycle for renewals, expansion and advocacy.
2. Evangelize your value.
Are you effectively measuring, monitoring and reporting the business ROI derived from your products or services? Are you personally engaging your customers on a regular basis to ensure their business objectives are being met throughout the lifecycle?
Customers who are recognizing real value can be cultivated into advocates that evangelize your products through development of user communities and forums. Identify your top customer champions and get them out telling your story to the market. Peer recommendations are critical to your success:
3. Personalize customer interactions.
Not all customers are created equally. Develop a process to segment customers by those who require a high-touch, personal approach versus those who can be nurtured through tailored, automated campaigns. For example, if customer usage data indicates that Jane had been logging onto your platform on average 4x per week, but recently dropped to 2x per month, you would want to call her to see why her usage behavior changed – before you lose her as a customer.
By looking at the size and health of your customers, as well as leveraging predictive analytics to determine their disposition, you can establish the right level of engagement.
4. Harness the right skill sets and incentives.
Ensure the groups that engage your customers regularly post-acquisition have the right skill set, incentive structure, and training based on their set of responsibilities. Your Customer Success and Sales teams have two very distinct set of responsibilities – Customer Success being an advocate for your customer and ensuring they are getting value, while Sales and Renewals should have incentive to identify and act on upsell and cross-sell opportunities.
By aligning the right incentives for Customer Success, Sales and Marketing, you can be sure to deliver a great customer experience and increase customer loyalty.
5. Continually optimize your performance.
Are you systematically capturing feedback from your customer-facing teams to learn what is working and what is not? Are you consistently monitoring customer campaigns and making real-time changes based on real-time results?
Make sure you are systematically tracking recurring revenue KPIs (such as MRR, CLV, Retention Rate, Renewal Rate, etc.) and leveraging A/B testing, as you can identify improvement opportunities and make adjustments to your business and campaigns to push toward optimum results.
How well are you creating customers for life? Download our new eBook to read more specifics for each of these best practices, as well as a step-by-step Customer Lifecycle Management strategy to help you create customers for life.
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