If you work in sales, marketing, or pretty much any other department that is involved with your company’s customers, you’ve probably come across some type of buyer’s journey or customer lifecycle diagram.
For the purposes of this post, we’ll focus on a six-step customer lifecycle that goes beyond just the buying phase. The six steps are: Discover, explore, buy, use, ask, and engage. As we dig into this topic, consider a dividing point between these six. The first three constitute a buyer’s journey, while the final three represent a customer post-purchase who continues to engage with the business.
It’s All about Attracting New Buyers, Right?
So many customer experience conversations begin and end with determining how to attract new buyers. Just take a second and run a query search for “attract new buyers” and you’ll be hit with multiple listicle articles about seven, ten or fifteen ways to “attract” and “trick” new buyers.
However, with so much focus on the early stages of the buyer’s journey — Explore, Buy, and Use — the later stages associated with existing customers, and what are often the most important stages, are forgotten — we’re talking about Ask, Engage, and Discover.
So why are so many companies compromising the loyalties of customers they’ve already won to focus on spending more resources to attract new buyers?
Forrester Research recently published a brief study entitled The Perspective Problem in the Customer LIfe Cycle: Your Company Undermines Profits by Misprioritizing Life Cycle Phases - Help It Stop. In this piece, readers are introduced to some of the common problems businesses perpetuate when trying to map Customer Experience (CX) and User Experience (UX) resources to a broader customer attraction and retention strategy.
Although many of the findings align closely with the B2C space, there’s plenty of insight to be gleaned for the B2B seller as well.
Let’s take a look at a few of the key takeaways, apply them to a B2B seller’s point of view, and identify how businesses can reevaluate how they view their customer lifecycle diagrams.
Your Existing Customer May be More Valuable than Your Next Customer
As noted in the Forrester report, many businesses overemphasize the early phases of the customer lifecycle. While it may seem imperative to concentrate sales and marketing efforts on attracting new buyers, retaining the ones you have with nurturing and ongoing engagement initiatives generally has a higher rate of return. But why?
1. Post-purchase is where the money’s at.
Forrester notes that customers care more about post-purchase interactions than they do about discover, explore, and buy interactions:
From the perspective of most customers, exploring, evaluating, and buying are merely a means to an end: Using the product or service for their benefit. That means that CX quality depends relatively little on the prepurchase phases - aside, perhaps, from finding a clever advertisement entertaining or appreciating a smooth checkout process.
2. An existing customer is a profitable customer.
It’s all about effort when it comes to managing the cost to serve a customer. New customers require extensive time, money, and other resources to attract and convert. But an existing customer, with the right strategies, can be more profitable in the long run. By providing them with ongoing information, education, content, and helpful services and support, your business may find that your existing customers are actually your most profitable customers.
3. Determine your goals and then take action.
We’re not suggesting you stop trying to grow your customer base. What we’re suggesting is that you reevaluate your strategy. Rather than piling your resources exclusively into sales and marketing, your customer success and support teams may help your organization realize greater revenues by investing in retention efforts as opposed to acquisition. After all, unless you retain 100% of your customers, doesn’t it make sense to focus on retaining existing customers as opposed to spending your way towards filling those gaps?
4. Invest in the tools that help retain customers.
When most people think of Configure-Price-Quote (CPQ) applications, they instinctually conjure images of sales teams using the application to assemble and sell products more quickly and easily. However, CPQ is more than a front-office sales tool. It’s also an invaluable resource when managing renewals, offering upsell and cross-sell opportunities, and allowing existing customers to self-serve. With an ecommerce portal powered by CPQ, B2B companies selling highly complex products and services can allow their customers, partners, and vendors to access their entire portfolio online, create error-free orders, and then either self-checkout or contact their sales person or account manager directly to facilitate finalization of the engagement.
You Need to Take Another Look at the Customers You Already Have
Your existing customers cost significantly less than trying to reel in new buyers. This isn’t news to most as it’s well understood that it’s much cheaper to retain an existing client than it is to go out and scrounge up a new one. According to Forrester’s study, “Acquiring new customers costs far more than retaining existing ones - between five and 25 times as much, depending on the sector you’re in (among other factors).”
At FPX, we’re focused on helping B2B companies better serve their existing customers as well as attract and retain new buyers. With our CPQ application, organizations can empower sales, connect with partners and value-add resellers, all while powering a comprehensive ecommerce solution that allows buyers to configure, price, and quote solutions and services independently.
To learn more about FPX and our CPQ software, reach out to us and schedule a time to speak with our team of CPQ professionals.