Who works with marketing and sales always have to face the never-ending dilemma: should I focus on acquiring new customers (at a more expensive cost) or should I focus on retaining the existing ones - and spend less money but more effort? The answer is not as simple as 2+2 equals 4, and in fact, this may depend on what are your company goals.
But whether you focus on new or existing customers, your ultimate goal is always to increase your company's revenue and growth. Remember that every new customer must become a returning customer. To retain customers and therefore increase revenue, bet on relationship marketing strategies, especially if you are a SaaS company.
As the name says, relationship marketing aims to build a long-term relationship with customers. The whole point is to foster customer loyalty by providing not only excellent products or services, but also great customer experience, customer service, and delivering value to the customer.
Find what you are looking for in the table of contents:
- What exactly Relationship Marketing is?
- The difference between CRM and Relationship Marketing
- How Relationship Marketing can benefit your SaaS
- Tips to implement a Relationship Marketing strategy
Marketing professionals are constantly looking for more: more emails, more followers, more conversions, and so on. But what this actually bring to the company? Revenue growth, of course! However, most of the time,these same professionals forget that the key to growth may be just in front of their eyes, and it's not more than investing on marketing to your existing customers.
As a SaaS company, you probably work on a monthly subscription model. Which means that you have to continue to properly deliver your value to your customers, in order to keep them interested in your product. Oh, and by the way, you must remember that you are in fact offering a service (SaaS - Software as a Service), and by that, you're providing an ongoing experience.
Relationship marketing is about the improvement of internal operations. One of the main reasons for user churn is bad customer service. Customers need to have their needs fulfilled in the simplest way. That's what shows a research from Harvard Business Review: "Loyalty has a lot more to do with how well companies deliver on their basic, even plain-vanilla promises than on how dazzling the service experience might be".
So it does pay off to streamline your internal operations to satisfy your customer's basic needs. According to Bain and Co., a 5% increase in customer retention can increase a company’s profitability by 75%. To make it even better: renewing a happy customer on average costs just 11% of what it would cost to acquire a new customer.
Bear in mind that a SaaS company gives more than a simple tool to its customer. It gives a resource to build up a strategy. Your service was created to facilitate the customer's life. Improve productivity, enhance the business, so convey this is the most simple and truth way.
Some people still confuses CRM and Relationship Marketing, but in fact customer relationship management (CRM) it's one of the tools that makes relationship marketing easier. We could say that the RM works on the strategy level while CRM is a tool (most likely a software) that helps implement the strategy.
The CRM is responsible for the most of the operational tasks and data that supports the relationship marketing strategies. This kind of software provides tools to gather customer's information like purchase history, demographics, details of orders, and anything that could help sales teams to assist the customer in future interactions.
If we consider that the main point of Relationship Marketing is to understand the user, anticipate their needs and create strategies to satisfy them and engage their loyalty, we can place CRM at the top of the chain.
The CRM allows the marketing and sales professionals to quickly and consistently deliver what leads and prospects are looking for while having access to each and every of their interactions, because their preferences, browsing and purchase history are recorded in the platform.
Ultimately, the CRM helps the customer sees that the business in interested in knowing more about them and is focused on using the gathered information on their behalf.
Relationships are the basis of every human interaction. But unfortunately, when it comes to businesses, relationships are usually difficult to quantify, define or evaluate. As a SaaS company, you need to stay ahead of your game and build a solid, real relationship with your customers. You need to know the person behind the business.
As an article from Smashing Magazine describes: "If we do not engage with our clients in a real, personal way, then we are just another vendor — and vendors are easily replaceable with better cheaper options. However, clients are much less likely to consider replacing people with whom they have real relationships".
SaaS should focus on the service they offer. Better service means more value, and more value means more sales. If your customer not only benefits from your product but also learns about it while using, the value has an accumulative effect over time and the result is improving customer loyalty even before leads turn into customers.
The more 'addicted' these soon-to-be customers get on your product, the more they can succeed in their business. But how do you manage to teach them about your product while adding value to your service? Coach them. Train them. How? With a multiple channel and team strategy.
Start a strong lead nurturing strategy in different communications channels, have a killer onboarding experience, have you customer success team to answer all your customer's questions and keep going with an ever improving customer service and experience.
The key is showing your leads that you actually care about their companies and their success, instead of hard selling your product. Showing yourself as a trustworthy company can increase user engagement, and consequently, build a more favorable brand reputation.
And this does matter. According to Ambassador, customers are showing increased interest in a brand’s reputation. Happy customers are likely to make more purchases, as well as recommend your business through referral. Relationship marketing it's a win-win situation.
The practical gains? Let's see three main benefits of relationship marketing for SaaS:
Less flirting: with the right relationship marketing strategy, it's possible to turn leads into loyal customers, more focused on value than price. They are less price-sensitive and more likely to stay loyal to your brand. In other words, your churn rate goes down.
Referral starts here: building strong relationships right from the first contact of the lead with your company usually result in a higher Net Promoter Score. When these satisfied leads finally buy from you, they tend to recommend the business to their colleagues and friends.
Develop leads who spend more: since they are less price-sensitive it's only natural that your returning customers buy more and buy more often. In fact they spend 31% more if compared to other customers. They are also are more likely to purchase products through upselling and cross-selling. In result? More revenue!
Reduce the cost of acquisition: referrals generate acquisitions. With more referrals you get new prospects, reducing the need to paid advertising and costly marketing campaigns.
There are a few actions that you can take to improve your relationship marketing strategy and achieve successful results.
- Deliver a little bit more and improve content
- Let them know that you're listening
- Follow-up the conversation
Providing valuable content for your customers and developing a content marketing strategy will also help you in your relationship marketing strategy.
Provide shareable content to educate and help your lead to go further through the conversion funnel, and also keep them updated with the latest technology news.
Remember that your leads probably found your website, blog, social profile or product because they were looking for a solution for their problems - and it may be probably more than one. The real problem-solving power comes from you. By layering service on top of the software, you provide additional value to your SaaS.
If they ask, respond it. If your customer ask questions, leave comments on your social media pages or website, or send a message using the live in-app chat icon in your website or product, continue the dialogue. Relationships are based on communication, so do not leave it as a one way conversation.
Since relationship marketing is an ongoing task, keep the conversation flowing through all the time with your leads. Send personalized follow up emails and approach them through in-site or in-app messages. Avoid just "checking in" and start a conversation instead. Ask them: do they have any complaints? Suggestions? Remember: talk instead of selling to them.
It's no secret that the customer is a company's greatest asset. Be careful not to mistake customer satisfaction to customer loyalty. One leads to another, but to achieve long-term customer loyalty you will have to work hard in building deep and strong relationships.
Setting up a relationship marketing strategy is a priority for SaaS companies, as it gives great results and business opportunities. Solid customer relationships drive sales, sustainability, and growth: the stronger the relationship built with the lead the longer they may stay with the company. Think individuals and not numbers. Understand that there is much more behind your customers that just a billing ticket in your revenue report.