For the people who work in B2B sales, “churn” and “retention” are the two words that need to stay on the top of your head if you’re trying to ensure your organization is on the path to long-term success. In the B2B industry, customer retention and churning customers can be critical when measuring the annual recurring revenue (ARR).
Moreover, it is also important to remember that both of these factors go hand in hand. Churning customers can make it hard to retain existing ones. But if you’re able to study existing data on the customers that have stopped using your service, you might be able to build a better retention strategy.
But when should you make a move?
The answer to this depends on your business’s churn data.
When you’ve analyzed your business’s churn data, you know what went wrong where. According to McKinsey, “executive teams that make extensive use of customer data analytics across all business decisions see a 126% profit improvement over companies that don’t” (McKinsey, 2014). It is also essential to understand that even though several companies like to boast about their significant data capabilities, few leverage it to its full potential.
According to Broadway Business research, only 32% of all B2B industry leaders are satisfied with their capability to use analytics. This means that there’s definitely room for improvement, which can come to your business with an organization like SalesGig.
Once you’ve analyzed churn data, you can start to see the benefits of customer retention.
Allow us to elaborate.
Continuing business with a customer that you’ve already acquired can be a lot more feasible than capturing a new customer. Getting a new customer means splurging on a marketing campaign. In fact, according to research, a new customer can cost businesses five times as much money as catering to an existing customer.
If you decide to introduce a new product or service in a market segment, your existing customers will most likely be the first ones to try it. Since they already trust you with their money, they know for sure you won’t disappoint them with your services.
A loyal customer ensures that your business sees sustainable growth. The kind of growth you can rely on and the kind of profitability that gives your business a wide safety net. No matter what the competitor might do to disrupt your sales, your loyal customers will always stand next to you. According to research, increasing customer retention rates by 5% can increase your profitability by 255 to 95%.
Vast volumes of data have brought along their fair share of challenges. To ensure your customers trust you for the long run, you need to ensure your business has a stellar customer retention strategy. To get started, let SalesGig do the hard things for you. Contact us today for more information.
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