A common question that many of our SaaS clients ask is: “What’s more lucrative, retaining a customer or closing a new one?”
Well, there’s really no debate. Studies prove that seventy percent of companies say it’s cheaper to retain an existing customer than gain a new customer.
This is why Forrester has dubbed this era the “age of the customer.” They conclude that strong customer relationships represent business value and, ultimately, business growth. For B2B companies, in particular, customer insight like understanding what your most lucrative customers are doing inside your company’s most important digital property—your web application—is inarguably more critical than cultivating new customers.
Here are four reasons why customer insight is important:
1. You can create 360º profile views of high-value customers
Gathering customer data around points like product usage, feature adoption, and voice of the customer all help product marketers better personalize engagement. Customer insight also helps customer success representatives understand where each user is in their journey from adoption to advocacy, and provide significantly better experiences. The more B2B brands know about their customers, the better they can deliver messages that resonate.
In Evergage’s 2018 Trends in Personalization Survey, 87% of respondents reported an improvement or “lift” from website or in-app personalization initiatives. Of those, 54% saw a lift of more than 10%. Respondents identified a variety of benefits from in-app personalization particularly:
2. You can reach customers with information at the moment they need it the most
This may be the most critical point in the importance of customer insight. By identifying customer behaviors, companies can determine what kind of information their customers need and when they’re most likely to need it. Customer success teams can pinpoint things like which product features they may be struggling with, when an account might be ready to expand, or whether a user could become an advocate, and then deliver the right message to address issues and milestones.
This level of intelligence enables SaaS companies to provide customers not only with optimal value but it demonstrates that they truly care about solving pain points and making life easier for the end user. As customers have come to expect more personalized and targeted experiences, the more information you have available to use for targeting and user segmentation, the more value you can provide.
3. You can effectively communicate product value easier
With competitors just a click away and unhappy customers unlikely to complain before they leave, it’s critical to show product value and positive customer experiences on a consistent basis.
SaaS businesses that fail to effectively communicate product value and meet unique customer needs tend to experience a higher level of customer churn, which can equate to millions in lost revenue for some companies. Moreover, for SaaS companies with technically ‘heavy’ products, communicating product value is even more complicated.
That’s why knowing your customer’s behaviors is essential to communicating value. For example, users who are struggling with a particular workflow may not know about the newest product feature that can help solve this pain point. The only way to understand that this disconnect exists is to analyze the in-app behaviors of customers. Effectively communicating value is also a great way to position your company as a trusted advisor to your target audience.
4. Customer insight can drive more qualified leads
Understanding your current customers and their success potential can help you better determine your Ideal Customer Profile. This can help your sales and marketing team better hone their lead gen efforts. Selling to your ideal customer can effectively eliminate churn and allow your team to develop repeatable processes that are specific, targeted, and highly scalable.
Additionally, when your best-fit customers become your advocates, they will send more qualified leads into your pipeline.
In sum, as B2B businesses look for new and better ways to grow, they must not overlook a critical piece of their revenue stream—their current customers. Leveraging customer behaviors will put companies on the path toward successful customer retention and increased revenue.
Looking for new and better ways to engage with your existing customers? Schedule your free demo to learn more about how UserIQ can help.