A new breed of mercurial buyers is swapping and hopping around the B2B ecosystem – leaving a lot of companies more than a little perplexed. For example, the average B2B customer churn rate is around 11 per cent, according to research conducted by the e-commerce provider Pitney Bowes. When you consider that many VCs estimate a maximum 5 to 7 per cent annual churn, 11 per cent feels uncomfortably high.
As well as legislative and compliance changes, cultural factors, such as the high turnover in senior positions, feed into this wave of growing market volatility. According to the Ponemon Institute, the average CISO now only stays two years in one job. For CMOs it’s less than four years. So, just when an account team has forged a strong relationship, their main contact moves on and a new broom arrives.
At the same time, the rise of SaaS (Service as a Software) makes it easier to switch providers. And, as the DDOS (Distributed Denial-of-Service) attack against DNS (Domain Name System) provider Dyn has demonstrated, there are often good reasons to build in redundancy by contracting more than one provider for business-critical services. Making it easier to switch, incrementally and dynamically, with little or no lock-in. But how can companies achieve sustained growth in this kind of environment?
Don’t try to fight the market
Of course, you need to reduce churn – but that doesn’t mean fighting to retain every single client. With the market changing at a rapid pace, and buyer preferences driven by short-term – and even irrational – criteria, you’d find it impossible to keep up. No single company could create and position enough products to appeal to every type of buyer or tether all potential flight-risks.
Instead, you need to focus on your most valuable customers. In 2011, an MIT study found that the top-spending 20 per cent per cent of a company’s customers contributed to more than 90 per cent per cent of its profits. So, by identifying the customer segments that deliver the highest lifetime value, you can target your PR and marketing efforts for maximum return.
Focus on the product
Mercurial buyers are hopping between providers and increasingly zoning out when it comes to absorbing the messaging you’re trying to get in front of them. So how do you grab their attention?
It may sound counterintuitive, but don’t focus too much on the customer when designing your campaigns. Instead, focus on communicating your products or services. Then, if your offering is positioned correctly, it becomes the perfect springboard to drive an engaging brand story and an effective campaign.
The challenge is then to build the right messaging and get it in the right media. How easy this is depends on how well differentiated your products and services are — but with the right partner agencies, there is always a way to achieve your goal (after all, it’s possible to market bottled water).
Make customer experience a quantifiable asset
Working with external partners – with the necessary expertise in research, analytics, and customer profiling – you can identify who your most profitable customers are. This allows you not only to craft a retention strategy targeted at those customers but also to focus your acquisition strategy on leads who share this group’s characteristics.
This is where customer experience measurement comes into its own. Rather than confining themselves to an annual brand survey, the best B2B brands constantly track and measure customer experience, perceptions and intentions – and adjust their planning and operations accordingly.
The best B2B brands constantly track and measure customer experience, perceptions and intentions – and adjust their planning and operations accordingly
For instance, when payment provider WorldPay worked with our research arm Loudhouse to improve its lead gen, Octopus Group conducted over 20,000 interviews in order to properly understand who the client should be targeting and what positioning and messaging would work best. It was a huge undertaking, but it delivered ROI of 20:1 and brought in 600 leads.
If you bring that depth of research to every part of the customer journey, you can expect to see a similar level of payback. Well-targeted research gives you a detailed understanding of the evolving decision-making and buying habits of your most valuable customers. Not to mention a better picture of the competitive landscape in which those habits are being formed. This provides the foundation you need to deliver a seamless customer experience; one designed to stand out from your competitors, from initial consideration and first contact right through to renewal.
You should even, counterintuitive as it may seem, make it easy for mercurial buyers to leave you, and take their data with them. In such a volatile market, they may well be back as circumstances change and your offering becomes more relevant to their needs.
Make it easy for mercurial buyers to leave you – and take their data with them. In a volatile market, they may well be back
This attention to detail will deliver the kind of customer experience that gives you the competitive edge. And, according to the Harvard Business Review, customers who have a good experience with a company spend 140 per cent more than those who haven’t.
Deploy PR and marketing that’s a qualifiable success
A well-executed campaign has a measurable impact on sales. The B2B market is becoming more and more challenging – but a higher turnover of clients also means a greater willingness to give new providers a go. For the most innovative firms – those able to most effectively combine detailed research with technical excellence and creativity – this is an opportunity, not a threat.