We were all taught that it’s less expensive to keep an existing customer than to create a new one. Today, the popularity of the software-as-a-service (SaaS) model of software delivery has renewed the focus on this age-old bit of business wisdom.
Before the widespread availability of SaaS applications, software vendors had to encourage customers to upgrade to new releases and take advantage of new features. If a customer was meeting its needs with the existing product, this could be an uphill climb, requiring costly and time-consuming efforts on the part of the marketing and sales teams.
The development of cloud computing brought with it the concept of subscription purchases for software. This was a radical departure for a technology sector that was built around shipping software in a box and then having the application be manually installed on servers and end-user machines.
But subscriptions, as everyone knows from industries outside of tech, mean recurring revenue. There was no turning back.
SaaS not only changed the way software was delivered, but the way it was developed, marketed, and sold. Instead of holding new features until the next version was ready to be shipped in a box or delivered in a download, new features were continually developed and made available to customers.
Now technology vendors were able to sell more than products and features. They could sell an experience. Instead of running plays that focused on marketing and selling, they needed to focus on marketing, selling, maintaining, renewing, and growing.
This strategy meant that teams previously considered as support or cost centers, such as customer success, needed to become key players in the revenue organization.
Revenue Teams Built for Recurring Revenue
Today, the revenue team at many B2B tech vendors includes marketing, sales, and customer success. These organizations focus on the customer lifecycle, from acquisition to renewal and growth. This aligns the roles in the revenue department with the customer lifecycle.
It’s not uncommon for software buyers to begin their relationships with vendors by running some sort of pilot program. Often one department in the organization adopts a tool first. As a result, there is a sizable opportunity to drive revenue from existing customers.
The “freemium” approach to software is designed to take advantage of this. Vendors allow users to try some features of the software for free, perhaps for a limited time, to prove its worth. Along the way, they show the freemium users the value of becoming a paying customer and unlocking more features.
Freemium strategies and tiered pricing plans allow vendors to grow revenue from existing customers by expanding their use of one product. But many software vendors develop more than one application. These vendors have an opportunity to introduce existing customers to additional products they develop and explain how they help users and their colleagues achieve their goals.
In years past, just who owned the relationship with existing customers could be a point of confusion for many B2B tech vendors. Sales is often protective of its relationships with customers. Customer service, as it was originally designed, was mostly devoted to tech support and help desk roles. Marketing was focused on customer acquisition. The rise of customer success teams gave existing customers a home in the revenue department.
A study from Deloitte credited cloud and subscription-first companies with making customer success core to their strategy. According to the study, 50 percent of born-in-the-cloud companies said CS was a strategic priority.
The report went on to say that companies that successfully adopt the mindset that CS is a strategic priority are likely to develop deeper customer relationships and uncover new business opportunities than they would have otherwise.
Helping grow existing customer accounts requires marketing. It’s not the same type of marketing as new customer acquisition, because the situation is completely reversed.
Marketers focused on customer acquisition are focused on communicating how their solution is better than the status quo, whether that’s a competitor’s product or no solution at all. Customer marketing is focused on defending the status quo and expanding the relationship.
When customer success and customer marketing are closely aligned, this strategy becomes much easier to execute. Customer success has an in-depth understanding of the relationship: what’s worked and what hasn’t worked, the detailed history of the stakeholders on the customer side, and how they are making progress toward the goals they set out to achieve at the outset of the relationship.
Visibility into the shortcomings is equally as important as understanding where the relationship is showing success. According to the 2023 IT Buyers Survey from TechnologyAdvice, only about 43 percent of IT buyers said their most recent business technology purchase met or exceeded their expectations.
Opportunities for Marketing and Customer Success to Collaborate
Here are four opportunities for B2B marketing and customer success teams to collaborate and grow relationships with existing customers.
Align Messaging and Content
Every message that’s built and every piece of content that’s created for customers needs to strike a chord. Customer success is the team best positioned to understand customers’ goals and pain points. They hear about the good (the value the product delivers), the bad (the obstacles to success), and the ugly (why customers fail to renew). Collaboration between marketing and customer success turns customer feedback into messaging and content pieces.
The knowledge that customer success captures as feedback from customers can also be used to build more effective lead nurture strategies, because current customers and prospects are often dealing with similar challenges and are in search of different solutions.
Product Marketing and Product Development
Feedback from customers is essential to product marketing and product development. Customers often help guide product strategy by talking about the features they use and like, as well as discussing the shortcomings of a product. But customers have also been known to influence product strategy by finding a use for a product that wasn’t initially envisioned by the team that developed it. That’s a jumpstart for your R&D right there.
Cross-Sell and Upsell
Cross-sell and upsell are an area where B2B marketing and customer success teams collaboration will really make the magic happen. Cross-sell takes place when a customer is offered another product from the same company’s portfolio. Upsell is when a customer upgrades from one product or one level to another (for example, from “Basic” to “Premium”).
Customer success is best positioned to identify target accounts for cross-sell and upsell opportunities because they have most of the firsthand knowledge of customer goals and product usage. They have the most insight into which customers might benefit from new products or new features.
By collaborating with marketing to identify the cross-sell and upsell accounts and developing the right message and delivery channel, these important arms of the revenue organization can increase annual recurring revenue (ARR). And as we mentioned at the top, these existing accounts will often cost less to retain than it would cost to replace their revenue with sales to new customers.
Customer Experience Takes Center Stage in B2B
Tighter collaboration between marketing and customer success also helps B2B organizations better respond to one of the biggest shifts in B2B in recent years.
Today’s buyers are taking a page from their B2C lives and putting more and more value into the experience of doing business with B2B vendors, from the first-touch marketing efforts straight on through to the sales and renewal experience. And the experience they’re looking for more closely resembles the way they buy in B2C.
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B2B buyers are increasingly digital natives. They grew up with most of the world’s information at their fingertips, which means they value a frictionless experience. They prefer self-guided research on digital channels. They value easy access to the information they need to learn about products and services. They value pricing transparency, so they know what the product or service is going to cost.
RELATED ARTICLE: Using Self-Service to Enable Buyers
If you boil down the elements of the buying process preferred by today’s B2B buyers, one thing is largely missing: interactions with other people, specifically people trying to sell them something.
As they do in the B2C world, business technology buyers are increasingly searching for and using vendors that let them have a seamless online buying experience, from initial research all the way through to making the purchase. No humans required.
That puts more pressure on marketing and customer success to provide buyers with the information they want in the format they want it. It also means marketing and customer success need to be vigilant in tracking how customers feel about their experience with the brand, since they can no longer rely solely on customer-sales relationships for feedback.
Measuring the Customer Experience
According to research from Gartner, companies experiencing positive revenue growth collect more customer experience data than non-growth companies. The Gartner survey found that nearly 80 percent of growing organizations use customer surveys to collect data on the customer experience, compared with 58 percent of non-growth organizations.
Surveys remain popular with businesses as a method of measuring customer attitudes, but survey fatigue is real. When customers receive too many surveys from a single vendor or are hit with surveys from every business they use, they begin to ignore the requests.
Another opportunity to measure customer attitudes lies with near and real-time analytics. Gartner’s survey found 43 percent of product managers at growth companies are using analytics to collect and analyze customer perception and sentiment data. This is compared with just 22 percent of product managers at non growth companies.
Customer attitudes and satisfaction are all part of the customer experience. And when buyers are happy with their experience, it’s much easier to grow revenue. Happy customers will consider the cross-sell and upsell offers that are sent their way. They will recommend vendors that deliver a good customer experience to colleagues and friends.
Going forward, the rise of roles like Chief Customer Officer might take the lead on customer success and customer experience efforts. But the importance of customer success and customer feedback to revenue growth is leading customer experience to fall under the responsibilities of the Chief Marketing Officer.
CMOs and their marketing teams own website messaging and the brand story. They oversee all of the messages that are sent to customers and prospects. And those efforts make up the foundation of the customer experience.