While businesses are always keen to acquire new customers, keeping the ones they have is an expectation for many CMOs. Consequently, a recent study [download page] from Brightback, found that nearly all (97%) of the more than 300 business leaders surveyed from B2B, B2C and hybrid companies say they have made customer retention a top priority.
But are businesses prioritizing customer retention enough? The responses are mixed depending on which sector the respondents are from. Two-thirds (68%) of B2B respondents are confident that their company prioritizes customer retention appropriately, though 29% believe they could do better. On the other hand, half (49%) of the B2C respondents feel their company could do better while just a bit fewer (44%) feel they are prioritizing retention appropriately.
Very few of the respondents in any sector feel their company is over-prioritizing retention at the expense of other initiatives. Only 3% of both B2B and B2C companies felt retention was over-prioritized while slightly more (7%) of hybrid companies feel other initiatives are overlooked at the expense of customer retention.
While Brightback’s survey focuses on larger companies (500 or more employees), a report by The Manifest found that only 6% of the more than 500 small business owners and managers surveyed say they are concentrating most on retaining their current customers.
What Tactics Are Businesses Using to Reduce Churn?
A recent report from CommerceNext and Oracle found that, in the case of e-commerce, almost half (45%) of the retailers surveyed said their retention marketing efforts were performing below expectations. The Brightback survey asked respondents what tactics they have tested and found effective in reducing customer churn. The responses tended to be mixed depending on the business sector.
Offering at-risk customers bundles or special deals is one of the top three most effective tactics that about 3 in 5 (58%) of B2C respondents find effective. On the B2B and hybrid side, testing a range of discount offers to customers at the point of cancellation was one of the most effective tactics for 51% and 45% of respondents, respectively.
Data from early 2018 shows that 4 in 10 consumers have cancelled a subscription. Offering the ability for customers to pause or suspend their subscription is a tactic that both B2B (39%) and hybrid (38%) companies have found to be among their most effective to reduce this churn. Additionally, preemptively engaging with at-risk customers before they churn and offering incentives is a tactic that all sectors (41%-B2C, 35%-B2B, 44%-hybrid) have also found to be among their more effective efforts.
What Customer Retention Objectives Are the Highest Priority?
When it comes to prioritizing customer retention objectives, the largest share (56%) of B2C respondents say that improving customer satisfaction through better customer experience and support is their highest priority when it comes to retaining customers this year. This is compared to only 14% share of B2B respondents who say that improving customer experience and support is their top priority.
B2B respondents have a more split view of priorities, with a one-third (34%) share saying they look to educate customers to facilitate usage and mastery of their service, with a similar (32%) proportion saying that onboarding new customers effectively is their top customer retention priority for this year.
B2B and B2C businesses differ, again, when it comes to initiatives they feel will have the greatest impact on customer retention this year. One-third (34% share) of B2C respondents say faster response times and better-trained customer support would have the greatest impact on their customer retention. Among the various options, though, about one-third (32% share) of B2B respondents cite regular monitoring and classifying of subscriber churn as the initiative which will have the most impact.
To read more about customer retention, download Brightback’s report here.
About the Data: The Brightback report surveyed more than 300 CEOs, founders and executives from B2B, B2C and hybrid companies with 500 or more employees across 28 industries.
The Manifest report surveyed 529 US small business owners and managers. More than half of small businesses (54%) have between 1 and 10 employees, and 46% have between 11 and 500 employees.