Marketing Strategies for Customer Retention and Growth During a Recession
By Chris Burke, Associate Director, ABM Solutions
With the economy on the brink of recession, now’s the time for companies to adapt their marketing strategies to focus more on retention and existing customer growth. When businesses are looking to manage spending, a strategy that prioritizes existing customers will be more effective for driving growth than relying on landing new net business.
According to a recent study from The Marketing Practice, many B2B marketers are already taking action. When asked, “how has your marketing adapted to the recent economic forecasts of stagflation and recession,” here were the top five answers:
- 46% emphasized growing existing customers or moving them to more profitable services.
- 37% put more budget towards brand building because it’s an excellent time to capture share of voice.
- 35% increased marketing budgets because it’s a good time to win market share.
- 33% accelerated timelines to launch new products/services where they can help customers respond to the economy.
- 29% changed messaging to focus on recessionary themes like productivity
Is your marketing strategy built to retain and grow customers during tough economic times? If not, now is the time to build out your capabilities here, as companies that have proven the ability to improve net revenue retention (NRR) and increase annual recurring revenue (ARR) are increasingly favored among investors.
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If you’re looking for a push in the right direction, here are three tips for getting started:
1. Focus on your current customer base
As a marketer, one of your primary objectives is to ensure customers have a positive experience at every touchpoint. Customer lifecycle marketing (CLM) will be key in B2B marketing over the next two years. CLM allows companies to generate growth and deliver value by nurturing a loyal customer base. Companies that can increase customer retention by creating exceptional post-sale experiences will do very well as we head deeper into a recession.
However, executing this efficiently and adequately will require collaboration. It’ll be essential to combine marketing, sales and customer success efforts. Marketers should know what Sales teams are doing from a strategy perspective, how they can support their efforts, and which customers are or aren’t buying. While Customer Success are focusing on new ways of extracting and demonstrating value for customers and working with Marketing on how to amplify those messages.
It costs 5x more to get a new customer than to keep an existing customer, and that’s in an average economic cycle. Now’s the time to focus more resources on keeping your current customer base happy and helping them adapt to this new reality.
2. Innovate to stand out
Innovation is a big opportunity to influence growth and customer retention during a recession. Here are some ways you can innovate to stand out in a competitive market:
- Don’t be afraid to take risks. The ability to take risks, experiment, learn and adapt is fundamental in modern growth marketing. Suppose you can delight current customers to secure and retain revenue. In that case, you’ll be well-positioned to experiment with new audiences and find the best way to turn them into future customers.
- Incorporate new technology and data sources like intent into your plans to increase targeting and efficiency. The ability to send relevant, personalized messages based on previous choices and behavior will enable you to engage in ways that resonate every time.
- Focus on helping customers get more out of what they already have to drive additional value and growth. Yes, you might look down the line to cross-sell and upsell, but there’s also opportunities to show them the benefits of driving additional usage and adoption of their current implementation.
- Even something as simple as changing your messaging in the short term to match customer or prospect pains can draw them closer to your brand. Be sure to speak their language and focus on what’s influencing their business, instead of leading with your solutions.
3. Meet your audience where they’re at
You know how to reach your current customers, but where else can you engage them?
There’s no shortage of opportunities, but communities and forums — both industry and profession-specific — are growing in terms of audience and reach. They allow marketers to share input, obtain feedback and communicate with target audiences. Better yet, showing up in an engaging environment where your audience least expects can make your brand stand out too.
Here’s how to spend your time within these online communities in a positive way:
- Ask questions: If something specific is on your mind, ask for feedback and advice. There’s no better way to understand your target audience than by asking them questions.
- Determine how and why your audience makes buying decisions: Why did they choose product A over product B? What factors did they consider? You can then determine if your marketing message aligns with your findings.
- Participate as an individual or expert: You’re NOT there to sell. You’re there to become a valuable member of the community. This means asking questions, providing thoughtful answers, and sharing your knowledge with others. Take a community-led approach, not seller-led. The more attention you gain within the community by providing value as a member, the greater the reward through personal branding, company branding, and, ideally, growth.
Knowing where to reach your customers is half the battle. There’s a greater chance of making an impact when you’re in the right place at the right time.
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While negative economic headwinds that cause low growth and high inflation suggest that marketers should cut budgets, now could be a great time to increase investments instead. Share of voice will become cheaper and easier to earn as competitors reduce investments.
For many companies, stagflation and recession are “red alerts” to pull back on spending and double down on the status quo. Rather than sit back and let this happen, the strategies above will better position you to remain profitable and drive growth during tough times.