April Dunford

April is a marketing executive with a broad range of experience at technology companies. She specializes in bringing new solutions to to market including messaging and positioning, market strategy,go to market planning and lead generation. April has a technical background (Systems Design Engineering) and deep practical experience in marketing, product marketing and sales.

Customer Retention: 7 Ideas for Marketers

Editor’s note: This is a guest post by serial entrepreneur and marketing executive April Dunford who is currently the head of Enterprise Market Strategy for Huawei. April specializes in brining new products to market including messaging, positioning, market strategy, go-to-market planning and lead generation. She is one of the leading B2B/enterprise marketers in the world and we’re really lucky to be able to share here content with you. Follow her on Twitter @aprildunford or RocketWatcher.com. This post was originally published in June 9, 2011 on RocketWatcher.com.

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As marketers we are often so focused on new customer acquisition that we sometime forget to pay attention to the customers that we already have. That would be a massive mistake.

It costs 6-7 times more to acquire a new customer than it does to keep an existing one. You are 4 times more likely to close business with an existing customer than you are with a new prospect.

I recently brainstormed with a CEO about programs for their current customers both to improve customer retention as well as to drive new business – here are some of the ideas we came up with:

1/ Give your Newsletter a Kick in the Pants – We all get too much email. Your newsletter is going to have to kick ass just to get folks to open it, let alone take action. What could you give customers that would be so interesting, awesome or remarkable that they’ll say, “Yippie, the newsletter arrived today!” What works for you will depend on your market but I’ve seen good results with sample code, a customer spotlight feature, sharing industry data your customers don’t have access to, interviews with industry experts and video snippets of product managers or support folks sharing their favorite tips and tricks. I’m sure you could come up with a hundred other ideas. If your newsletter doesn’t feel like hard work to create, you could probably do better.

2/ Campaign to your Lost Customers – You are twice as likely to close business with a lost customer than you are with a new prospect. With close rates like that, you should be treating these folks like hot leads. Doing win-loss interviews can help you identify patterns around what went wrong in the first place and get clues as to what to offer them to come back.

3/ Campaign to your Inactive Accounts – These folks are like a loveless marriage – they haven’t divorced you yet but the thrill is gone. Maybe they stopped paying for maintenance during the downturn because of cost-cutting, or needed a feature you didn’t have (or they didn’t know you had), maybe there weren’t enough people signed up at the time to make the service interesting or maybe they were never really “activated” customers in the first place. Similar to a win-loss analysis you’ll want to get on the phone with a bunch of these folks to figure out what the patterns are and how you might get them to, ah, renew their vows with you.

4/ Get Marketing and Customer Service Talking to Each Other – Only 10% of your unhappy customers will tell you. The others tell their friends. Your communications to your customer base can help keep customers informed and that’s a good reason to get marketing and customer service talking to each other. Marketing can help communicate workarounds for common problems or information about expected fix dates for known issues. And don’t forget to make it easy for people to complain via any of your communications channels (including the marketing ones). The sooner you know, the sooner you can do something about it.

5/ Expand Inside Accounts – Think about ways to expand your reach inside larger accounts if you sell B2B. I once convinced a big retailer that had done a small deal with us to let us do a free coffee and donuts event in their cafeteria that turned into 2 six-figure deals. Don’t be shy about asking your sponsor inside a large account about how you might start a conversation with other groups.

6/ Help Customers Promote Themselves – Smaller companies are looking for ways to promote their products and services and drive links back to their own sites. I once had a Fortune 500 CIO agree to do a video testimonial with me mainly because he was a new CIO and wanted to raise his own personal profile for his next job. I always wonder why companies don’t give more awardsto their customers and partners. Everyone loves to get an award no matter who’s giving it out and when they brag about winning the “Excellence in Accounting Software Deployment” award, they’ll likely mention your name too.

7/ Show Them the Love (at least 20% of them anyway) – A few months ago I signed up for a pre-launch list for a new service. I was asked to Tweet about it as part of the sign-up, which I did. After the launch I got a form email thanking me for being a top driver of referrals (plus a t-shirt if I sent them my address). A personal email would have made a MUCH bigger impact on me, and how much time would it have taken? I bet I could write 100 of them in a day. I don’t want a t-shirt (side note–if your customers include women, you might want to re-think the whole t-shirt thing), I want to be thanked like a person and not some a faceless “top referrer.” Your business makes 80% of it’s revenue from 20% of your customers. Quit being so lazy – pick up the phone and pucker up.

7 Startup Customer Discovery Questions

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Folks at startups have different levels of experience when it comes to working with customers. At the early stages when you are identifying the problem to solve, the key features of the solution and the customer segments that are the right fit for the solution, you’re spending a lot of time with customers trying to tease out as much information as you can. Last week I was asked by a new founder what types of questions he should be asking in these meetings. Here are a few suggestions:

What does your typical day look like? – This one is especially useful at the earliest stages when you are still trying to get a deep understanding of the space, the customers and what the key pain points are for those customers.
If you could change anything at all, what would it be? – This is a good one to get at the most pressing problem that a person is experiencing with a particular task or process.
What is the biggest pain you have today? – This will have to be framed within the context of the broader space you are looking at of course. The key with this question is to probe around the characteristics of the pain. Why is it painful? What is the measure of that pain (time, effort, etc.)?
How are you solving this problem today? – Again, try to ask a lot of open-ended questions around this one too. When was the solution implemented? Why was it done like that? Who made the decision?
What is this problem costing you? (lost revenue, lost customers, increased service costs, etc.)? – This is your first indication of how the customer might measure ROI no a solution in this space.
Who would you expect to solve this problem? – I like this one because it tells me a bit about how a customer would define the solution in terms of market space and also starts telling me something about channels. For example, in a recent set of interviews I did the customers said they would expect their phone carrier to deliver the solution to the problem (vs. getting it directly from a software provider) or they would expect to get it from a local VAR. In another set of interviews I did for a different product the answers were IBM, Oracle and Microsoft – with clearly a different set of expectations around that for service, price, etc.
Who else has this problem? – This might be different groups in an enterprise or different groups of consumers. It’s an interesting question to ask to see what else the customer is seeing in the space.

A Startup Marketing Framework (Version 2)

Back when I was running my consulting business I published a marketing framework that I used as a tool to explain to startups the types of things that I could help them with. I thought it would be useful for startup marketing folks as a guide and I think it has been – it continues to be one of the most popular posts on this site.

Since then, I’ve gotten a lot of smart feedback on the framework and I’m also back to working inside a company again so I thought it would be interesting to revisit the framework.

Assumptions

As I explained earlier, this framework doesn’t intend to cover Product Management (thePragmatic Marketing Framework does a good job of that) but rather the intention was to look at it from a purely marketing point of view. This Framework makes the assumption that you have a product in market, you feel fairly confident that you have a good fit between your market and your offering and you are ready to invest in lead generation. If you aren’t there yet, there is a lot here that you won’t need to (and more importantly, shouldn’t) worry about yet. Lastly, my background is more Business to Business marketing so like everything else on this site, this has a B2B slant to it. That said, I think most of it is very applicable to a B2C startup.

Market Knowledge

Segments – Based on your interaction with early customers, these are the segments that have the most affinity for your offering and are the target of your marketing efforts. These need to be well defined and very specific. I’ve had folks ask me where buyer/influencer personas fit and I include those here as part of what you need to understand about your segments.

Market Needs – From your experience with early customers you will be able to articulate the unmet needs in the market related to your segments (and beyond).

Key Points of Value – These are the most critical key differentiated points of value that your product offers. This is not a long list of features but rather small number of key attributes that customers in your segment love about your product. This is important for startups in particular to understand the real essence of why people buy your solution and it has a big impact on messaging, campaigns, sales strategy, etc.

Competitive Alternatives – These are the alternative ways that prospects in your segments can attempt to address their needs without your product/service. These may be competitive offerings, features or pieces of solutions in other spaces or the always fearsome “do nothing”.

Business Strategy

Business Model – This describes how the company makes money from the offering.

Sales Process and Strategy – The sales strategy is how the company will sell the product (including the channels if applicable). The Sales Process is the detailed step by step process that a prospect goes through on the way to becoming a customer. It’s important to note that this process starts long before a prospect interacts with a sales person and starts in the information gathering phase.

Market Strategy – The market strategy is a higher level view of how the company plans to scale in the market from early adopters to a broader market, including the segments to be targeted and in what order. (in Crossing the Chasm, this would be the description of your lead pin and the adjacent pins)

Partner Strategy – This box is new from the last version of the framework. I had previously included indirect sales channels in “Sales Strategy” but there are more reasons to partner than just sales (sometimes it’s for marketing purposes, or to provide services for example) and since Marketing is usually responsible for this at a startup I thought it needed to be included.

Tactics

Outbound Lead Generation – On the original Framework I simply had one box for “Lead Generation”. I’m deeply involved in Lead Generation with my current role (something I was less focused on as a consultant) and I started to think that such an important set of tasks deserved to be dissected a bit. Onbound Lead Generation in this framework is the plan including budgeting and task execution for lead generation tactics that involve “pushing” marketing messages out to an audience. This includes traditional marketing tactics such as events, advertising, telemarketing and traditional email marketing.

Inbound Lead Generation – This box is similar to the above box except that it includes that set of tactics that you are running that are focused on attracting prospects to you (rather than pushing messages out to prospects). This includes blogging, social media marketing, content marketing, and organic search tactics.

Retention and Engagement – The plan and budget for tactics aimed at retaining existing customers (really important for SaaS offerings) and engaging existing customers both for retention but also for improving customer satisfaction, cross-selling and up-selling.

Visibility – This is the bucket for all tactics related to ensuring that non-users of the product can observe that others are using it. This includes product features that encourage people invite their friends or display to a person’s network some facet of using the product, referral incentives, website badges, shareable content, reviews and awards, customer testimonials and success marketing, etc. (I talk about this in Startup Marketing 101)

Content

Messaging – This includes the company messaging, product value proposition, company and offering stories, responses to common questions, objection handling and reassurances for perceived risks.

Marketing Content – In the original version of the Framework, I had a single box called “Content Strategy”. I believe that the importance of content is growing to the extent that I think this deserves more attention. Marketing Content should still be planned out in a content strategy that will lay out what content will get created and for which purposes. This will include blogs, video, podcasts, whitepapers and ebooks, research and data analysis, press releases, shared presentations, and anything else that is informative and helpful to prospects.

Customer Content – This is a new box I added that is specifically focused on building a plan for content for customers (as opposed to prospects). The purpose of this content is customer retention and engagement (and it’s not an accident that this box sits next to that one in the Framework). Again, for SaaS type businesses, I believe that retention is increasingly important and marketing should be putting more energy and effort into “marketing” to their existing customer base.

Media/Influencer Outreach – Actions, programs and tactics related to working with reporters, analysts, writers, bloggers and other influencers.

Optimization & Market Learning

Funnel Optimization – The ongoing process of tracking and analyzing each stage of the sales funnel with the goal of making incremental improvements. (I did a post on some B2B metrics that I track to look at funnel)

Results Tracking – This was ROI Tracking in the last version but I broadened it out to Results Tracking. Obviously for each item of marketing spend, tracking the return on that investment with the goal of doing more of what works and less of what doesn’t is still something every startup marketer needs to do but there are other metrics that you will be tracking as well that aren’t necessarily “ROI” numbers per se so I broadened this one.

Customer Learning – The ongoing process of meeting with customers and testing the assumptions you have about their needs, environment, information sources and influencers, competitive alternatives, market trends, etc., capturing that information and feeding it back to the rest of the organization.