Customer loyalty has gone through a turbulent time in the last few years. However, the maturing of SaaS applications, combined with more agile development models and volatile market forces, means that B2B vendors must pay more attention to their customers’ needs. Historically, the ERP sector could afford to be less focused on this topic, as customers purchasing an on-premise ERP platform were likely to stay put for seven-ten years. Yes, the vendor had to provide support, but it was unlikely customers were going to switch out entire systems, even if they were dissatisfied with the product or services they received.
Things are different now, as SaaS means contracts are renewed more regularly. Of course, the aim is to keep customers on the platform – but being in the cloud gives the customer considerably more flexibility. At the same time, low-code tools and open APIs make it easier to integrate applications from other vendors, so customers don’t necessarily have to rely on one vendor for all their business application needs.
Indeed, ERP customers are also consumers, so they’ve grown accustomed to agile, responsive user experiences and they expect similar from their business applications. Add to that the relentless pressure to drive operational efficiencies and react to new opportunities, and even B2B customers are quite rightly demanding more in return for their loyalty.
Get customer experience right and watch customer loyalty grow
There are plenty of data points that highlight the importance of customer retention vs customer acquisition. If an organization only increases customer retention by two percent it will have the same effect on profits as cutting costs by ten percent. And the statistic cited most often is from Frederick Reichheld, Bain & Company: if a company increases customer retention by five percent, profits increase by 25-95 percent.
There is sometimes an awkwardness about discussing profitability, particularly as a motive for investing in customer success and experience. It appears self-interested, but the reality is that there is a direct correlation between customer loyalty and business performance. We know happy customers invest more – again, an often cited figure is that it costs six-seven times more to attract a new customer than to retain an existing one. Therefore, it should be a priority for the customer-focused team to show how they can monetize customer success: from persuading the happiest customers to invest more, to reaching out to the long tail of smaller customers who could grow with the company and might buy more products and services over time.
However, understanding where the opportunities lie requires a far deeper understanding of the customer. If an organization does not have that knowledge and understanding, then it will lose out on opportunities. This is harder for teams with constrained resources and less bandwidth, but this emphasizes the need to rely on technology to create a holistic picture of how customers are using products.
The goal must be to create a 360o view of customer data. This will enable an organization to discover the health of a customer account by looking at factors such as the customer’s engagement levels, advocacy and churn risk. The more data that is available, the more it can be optimized for even deeper insights into behavior. Of course, it is critical that the customer data is accurate, reliable and can be queried with confidence. Get it right and it is possible to remove human error as well as offer scalability, which can potentially be delivered through the latest automation and AI tools. By tying AI and ML to customer data, the team can set triggers to identify incorrect manual actions and use automated digital assistants to provide recommendations, such as when to create a customer check-in, make a special offer or offer a product tip.
Building customer loyalty is a job for the whole organization
Having developed customer strategies for many years, it may be unsurprising to hear me say that a focus on customer success must be a top priority for every senior leadership team. It is clear that failure to do so will result in a loss of business and opportunities. The goal should be to double down on customer experience investment, even in a time of constrained budgets, and the owners of the strategy should make audacious plans for dynamic approaches to customer success.
The strategy should not just be internally focused, because inspiration will also come from external sources. Teams can act smarter and spot more clues of customer sentiment by trawling through social media, observing below-the-line comments or recognizing a slowdown in support tickets.
Finding ways to encourage the rest of the team to join in is vital. For example, could tweaking processes, teams, or skills within teams enhance the understanding of what’s happening with customers? One practical way to do this is by working more closely with adjacent teams. Having the customer success team sit ‘two in a box’ with sales account teams is one option and sales teams can be encouraged to input by making it as easy as possible to feedback. A few taps on a smartphone or simple software and UX incentives to ‘like’ and share make it quicker to gather feedback. Enabling customers to network and share knowledge with teams is also much easier today with online communities such as the Unit4 Community4U.
All of these things combined will create plenty of opportunities to listen, learn and improve. We have found that appointing customer success champions builds the understanding of what customer success means and strengthens a customer success culture. This all goes towards remembering the human side of customer engagement, and how we feel as consumers when we have a good experience. In the SaaS era, only the businesses that put this front and center will avoid the costs related to doing nothing.
This blog has been sponsored by Unit4.
