Retention is the new acquisition. Just think of this as one of the new axioms forced upon us by the COVID 19 pandemic.
Because of the nature of today’s fears and touch points, the roles of sales and marketing have changed. And, they will continue to change as we settle into the new normal.
I read an article by Roger MacDonald who is a well-respected columnist on Sales & Marketing. He explained that this pandemic is one of a long line of disruptions in the buying and selling process. He says that these kinds of disruptions are fertile ground for innovation.
That’s because we are forced to re-invent ourselves. We need to do things differently. And, we need to communicate this to our customers and stakeholders. This way they know that we are doing everything we can to deliver their goods and services in a timely, safe and secure fashion.
Companies that can innovate inspire their customers. And marketers need to be able to effectively convey this.
Why do I say that retention is the new acquisition?
One of my colleagues told me about how their client reorganized the way the deliver customer service. They set up a service system combining virtual and on-site processes. This reduced service call times from nearly 2 hours to 28 minutes. And, this new system addressed their customer’s desire to reduce non-essential physical contact.
What I found astonishing about this change it that they did this incredibly quickly, within 48 hours.
But, what I found most awesome is how they are addressing their current customers’ concerns, Because of their stellar customer service, they are retaining their customers.
B2B Moves from In-Person to Virtual
All of this reminds me of Peter Drucker’s famous words: “Business has only two functions, marketing and innovation. These produce revenues. All others are costs.”
Just think about how the cost of sales has changed.
Historically, B2B sales were mostly face-to-face. Think pharmaceutical sales camping out in front of doctor’s offices. Or office supply reps visiting large corporations and taking physical inventory of what they had in the supply room.
Well, no one is flying to their customers now. Companies aren’t investing in trade show booths, specialty products and big dinners with prospective customers.
What they are doing now is protecting their market share. They are focusing on retention.
It just goes to show that businesses need to innovate how they are handling their existing customers or they will lose them and go out of business.
Develop New Strategies
Roger says that we shouldn’t bother asking if we will ever get back to normal. He says that innovation drives forward motion. In my mind that means innovate for where we are now.
With this in mind, instead of setting goals for new sales, consider focusing on retention rates. We all know it takes far less to retain a customer than to acquire a new one. Make retention your mantra. After all, retention IS the new acquisition.
Develop new infrastructure to handle customers’ new needs, just like the example I gave. Think an upgraded customer call center with the technology that lets TSRs get a holistic picture of a customer. This way they can actually help them, rather than transferring to another department. I know I get outraged every time I am put on hold and sent to another “helpful customer service agent” who asks me the same security questions. Personally I would be thrilled if I could make a single customer service phone call to American Express. It would be awesome if they could pull up my records and get a global view of my account. This way, they could solve my problem, save me time and make me feel more valued.
Relationship Building is the Key
Encourage and foster virtual relationships. Sure, we’re not really in the room where it happens. But I can see you and you can see me. That counts for a lot. Salespeople can cover much more territory and make more productive calls every day. We’re saving a lot of travel time. And a lot of travel-associated dollars. Now, it’s important keep up with relationship calls that focus on retention.
Maybe companies can rethink their compensation or commission structure. Since retention is the new acquisition, consider revising sales goals.
I agree with Roger MacDonald that we shouldn’t be asking when we’re going back to normal. This is the new normal. Retention is king. And we need to redesign our strategy with that in mind.