In B2B, many companies make the mistake of focusing on developing new business when they should focus more on customer retention programs. A case-in-point is the technology sector.
In its “2013 Customer Loyalty Survey,” ServiceSource (www.servicesource.com) reveals that technology vendors — hardware and software — are blowing revenue opportunities because they drop the ball in customer relationships.
ServiceSource polled 200 IT decision-makers about their relationship with hardware and software vendors.
Less than 18 percent of respondents were content with their IT providers.
Fifty-two percent indicated they would start shopping around.
Sixty-six percent said their relationships with vendors were “complicated” — meaning they were dissatisfied.
“It’s no wonder that customer churn is top of mind for every company,” said Christine Heckart, executive vice president of marketing, Strategy, people and systems at ServiceSource.
“As businesses focus more and more on recurring revenue, they can’t afford to win customers just once and expect fidelity for life,” she added. “They need to win them over and over again.”
Most IT departments feel neglected and ignored, with 57 percent of respondents only hearing from their vendors at renewal time, if at all, according to ServiceSource.
Other key findings:
– 52 percent of respondents received calls or emails from their vendors’ competitors at least once per month.
– 42 percent take sales calls from their vendors’ competitors at least once per quarter; 20 percent take them at least once per month.
– More than 25 percent of respondents participate in competitor webcasts every quarter, with 69 percent at least once a year.
– 49 percent have used competitive intelligence from a sales meeting to renegotiate a current contract.
– 65 percent of on-premise software respondents view SaaS as a potential suitor to replace existing systems.
– Of those with a preference, respondents were twice as satisfied with their hardware vendors as their software vendors, indicating that loyalty is harder to maintain as you move up the technology stack.
“As businesses focus more and more on recurring revenue, they can’t afford to win customers just once and expect fidelity for life. They need to win them over and over again.”
Ms. Heckart maintains the technology companies’ failure to be attentive to their customers costs them billions in potential revenue.
“This outdated approach results in businesses leaving significant revenue on the table,” she asserted.
“In fact, most companies make the majority of profits from the customers they’ve already won,” she added. “This is a major mindset shift and requires new thinking, tools, and focus.”
From the Coach’s Corner, for better customer loyalty and revenue, here are valuable tips:
Strategies for Maximum Customer Loyalty, Profits — Customer retention is important for profits in good times and bad. Here are customer-retention tips, and social-networking tips from a B2B sales pro.
Energize Your Customer-Loyalty Program with 6 Steps — The quickest way for established businesses to optimize revenue is to have a stellar customer-loyalty program — there are six steps you can take for repeat sales and referrals. If you’re not a great steward of your current book of business, it’s futile to look for new customers.
Internet Shoppers Demand 3 Cs – Customer Experience Study — Success in e-commerce is increasingly challenging for retailers that want to dominate in brand preference, customer loyalty and word-of-mouth advertising. That’s because consumers want more and more in the three Cs — channels, choices and convenience.
Why Companies Are High Maintenance to Customers (but Don’t Know It) — Businesses are losing more than they know because they inconvenience customers. Such negative customer perceptions result in lost opportunities in revenue growth, tarnished branding and smaller profit margins, according to a study.
Why Your Customers Stay or Leave – Insights from Study — Despite all the emphasis on speed in customer service, it’s not the salient factor in keeping customers happy. A study confirms that the power of emotion is most important, according to a January 2013 published report in QSRweb.com.
“The purpose of a business is to create a customer.”