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Keep Your Customers Coming Back: How to Market to Returning Customers

by Jeff Weinberger     

WelcomeBack.jpgAre you in a business that depends on returning customers?  Or a business that sells a subscription service?  If you are, then you already know intuitively that bringing your customers back – or ensuring they renew – is the lifeline of your business.

Knowing that, are you spending disproportionately on new customer acquisition and leaving renewals to a customer service team that lacks the incentive to maximize return/renewal revenue?

Many of my clients are in the technology industry, which is in the midst of making an industrywide shift from one-time product sales to subscription based services (the trend to so-called cloud computing is leading the way).  In the old model, it was fair to assume that once a customer purchased a product, they would most likely use it and then buy smaller add-ons, such as upgrades or service contracts.  In that model, most of the revenue came from the initial purchase, so most of the marketing and sales effort went into new customer acquisition.

But as the model has shifted, the investment has not kept pace.  My clients see symptoms such as customer service teams that are expected to renew their customers but have little or no incentive to do so or sales reps that have no incentives tied to long-term customer success.  The result?  Churn (customer turnover) rates as high as 33% are common.

So how do you keep one-third of your revenue from walking out the door every year?

The most common response I get when I ask this question is, ”Good customer service.”  But what does that mean?  It’s usually measured by anything from product performance, to support center response/resolution rate, or to customer satisfaction survey scores.  This is all good, and these are desirable results.  But they are not (necessarily) what keeps your customers coming back.

To succeed in a repeat customer or subscription renewal business, you need to do two things very differently:

  1. 1. Redefine your business strategy and goals to align with this desired result.
  2. 2. Create metrics that both demonstrate success and allow consistent incentives to be   

    provided to those teams responsible for that success.

Aligning Your Business Strategy

You have, I presume, a very successful sales and marketing strategy and process for acquiring new customers.  Do you have a parallel sales and marketing process for bringing customers back?  This won’t be the same approach as customer acquisition, but it will take advantage of the existing relationship – and everything you know about your customer and how they value your products.

The information you have from your ongoing customer relationships will determine how to set strategy and process for renewal/return sales and marketing.  To define that strategy, you must answer questions such as

About Jeff Weinberger

DS3 Consulting founder Jeff Weinberger found his passion in helping organizations identify and develop critical, yet often overlooked, strategic opportunities. With a reputation for being innovative and, well, disruptive, he helps organizations maximize the value of their key relationships to create, adapt to and capitalize on disruption in their markets. A recognized thought leader, speaker, writer and blogger on sustainability, disruptive marketing, and Web 2.0/Enterprise 2.0 technology issues, Jeff’s writings can be found at http://www.dsthree.com/blah-blah-blog/ and the Twitter link below.

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