The Overlooked Power of Retention, Reactivation, and Expansion in B2B MarketingThe Overlooked Power of Retention, Reactivation, and Expansion in B2B Marketing

The Overlooked Power of Retention, Reactivation, and Expansion in B2B Marketing Transcript:

Jeff White: Welcome to The Kula Ring, a podcast for manufacturing marketers brought to you by Kula Partners. My name is Jeff White. Joining me today is Carman Pirie. Carman, how are you doing, sir? 

Carman Pirie: I’m doing well. And you?

Jeff White: I’m doing great. Thanks. 

Carman Pirie: Look, it’s it has often been said, I think from me, because I get excited,  when we talk about something on the show that we haven’t talked about before.

Jeff White: True. 

Carman Pirie: And here we are, like 300 and some odd episodes in, and it continues to happen. 

Jeff White: I know, and in fact. We’ve had a lot of conversations lately where we’re like, Wow, that is really interesting, and we haven’t covered this before. So there’ll be a whole spate of interesting topics coming up on The Kula Ring.

Carman Pirie: Exactly. Everybody who’s listening to the show is going to get sick and tired of listening to me say, I’m really excited we haven’t talked about this, but nevertheless, I’m not faking it. I haven’t done it in that regard. It’s just, it’s it’s really refreshing and I think it speaks to just how many layers there are to this manufacturing, marketing onion, so to speak. 

Jeff White: Absolutely. That deserves its own podcast. The manufacturing marketing Onion.

Carman Pirie: Which do we do a kind of a riff on The Onion?

Jeff White: basically…

Carman Pirie: All right. We’re gonna lose the plot. We need to get back. Bring it back, Jeff. 

Jeff White: If we do, we have to bring it back. Yeah, I’m really excited. We’re gonna be chatting about retention today and the expansion of accounts. And it’s not, as you say, it’s not something we’ve covered before. But man, if you go to a B2B sales conference, especially one in manufacturing, this is all you’ll hear about retaining and expanding existing accounts.

It’s rarely about hunting and finding new ones 

Carman Pirie: and they don’t wanna dismiss the reactivation part either because that’s an interesting kind of, middle point between retention and expansion in some 

Jeff White: way. Without further ado, indeed. Joining us today is Ruth Stevens. Ruth is the President of E-Marketing Strategy. Welcome to The Kula Ring, Ruth. 

Ruth Stevens: Thanks, I’m so glad to join you, gentlemen. 

Carman Pirie: Ruth, you say that now, but it’s early days in the record. I wanna really thank you for joining us. It’s a delight to have you on the show. And perhaps we could just start by learning a little bit more about you and how you spend your days, if you would. Maybe fill our listeners in and give them a bit of background. 

Ruth Stevens: Thanks. I’ve been a self-employed consultant in B2B marketing, sole practitioner type for 25 years now, and I’m also a professor of marketing at NYU Stern Business School here in New York City. 

Carman Pirie: Very cool. And you said 25 years, like it was a bad thing or something, but you’re just getting started.

Ruth Stevens: I like that attitude. Thank you. I’m going to adopt it immediately. 

Carman Pirie: Look, a good friend of mine just recently sold his agency, actually. He was based in New York, New Jersey. And he’s well into his seventies, and I believe he was just a couple of days after selling the agency, he incorporated a new business. That, for somebody who’s 50 that gave me a lot of future perspective, I thought. 

Jeff White: Entrepreneurialism is a bit of a, it gets in you, yeah.

Carman Pirie: You gotta do something. Yeah. Look, Ruth, it’s a delight to have you on the show, and I’d like to, we’re diving into this topic of retention, reactivation, expansion. Is this something that you both lecture on as well as assist clients with? 

Ruth Stevens: It is, and it’s been an underemphasized factor in B2B marketing for as long as I’ve been in the field. So I consider it a personal mission to almost proselytize about it, and the business case is just so clear. Anyone who’s been in the world of customer management can explain.

The logic that much of our profits come from current customers and the value of a current customer is, some people say, as much as six times that of a potential prospect. And at the same time as marketers in a B2B company, we are often focusing a hundred percent of our efforts on customer acquisition, namely prospecting and lead gen.

And so that means that it’s the Salesforce account management is usually the name of it. Sometimes customer success. The Salesforce has the entire responsibility for managing the current customer relationship, which is great, they’re really good at it. But that means that marketing thinking tools, tactics, strategies are going to waste in that area.

So what I like to say is you can maybe double your revenue without bringing in a new customer. If you just pay attention to current customers, keep them longer, encourage them to buy more and extract more value from that particular relationship. 

Carman Pirie: I’m struck by the insult that we foisted onto salespeople frequently, which is we will and I’m guilty of this, I’ll talk to whether, it’s a prospect or just somebody we’re interviewing on a podcast or what have you. And I’ll ask ’em about their sales organization and how much time they spend hunting versus farming. And it’s absolutely a pejorative question because I know they’re going to say farming, and I know we’re all going to believe that hunting is the more valuable activity and that you just can’t get those poor salespeople to do it. But you’re actually like your rased of farming here, which is I am and I think so much of the, frankly, modern thinking on this is that. If we’re going to farm accounts, we need maybe to use it like a customer success team or a customer service team and try to find ways for the salespeople to sell.

I guess structurally speaking is that what you advocate as well? Is that there should be a team more dedicated to it or are you saying No? No, actually more and more of sales activity ought to be around retention and expansion of existing accounts. And not to follow the sales team. 

Ruth Stevens: I’m saying have the marketing trained members of the group add their expertise to the account management function. And, I’m really not an expert in organizational structures and who does what to whom. But I do know that if a sales trained and culturally brought up person is the only one managing an existing customer relationship, then that relationship is gonna be suboptimized and marketers are trained in a lot of the techniques that can expand and retain the customer longer, bigger.

Carman Pirie: So you think and when you say that, are you talking about education on new products? I guess, what is the, where are the expertise that you feel marketing really brings to this table? 

Ruth Stevens: Yeah, thank you. So one immediate example is data analytics and assuming we have a marketing database of some sort where we can keep an eye on the customer behavior. Watch what they’re buying, how are we communicating with them dear old recency frequency and monetary value type thinking. Then we’ll see signals. Business opportunity signals, we’ll see possible defection signals, and that data can be an important driver of how we manage the account. That’s just one example. 

Jeff White: How do you mobilize the account team with that information that perhaps they’re not necessarily used to having that from, this is how our current customers are acting, you should consider doing X, Y, or Z. How are you bringing that to life for them?

Ruth Stevens: A classic example is known as Reasons to Call, which is a data analysis that suggests based on the behaviour in the account, and not only that particular account, but all the other accounts and our knowledge of how a great account behaves. We can provide the account managers with reasons to call meaning, a classic example is the cross-sell strategy, where we know that companies that buy product A often, buy product B three months later. I’m making this up, of course, and then when Product A is purchased, we notify the account manager that in three months, they should introduce Product B into that account. And marketing can help too by providing collateral, outbound communications and so forth. But the point is to be active in looking at the data signals for insight into how to manage the account more effectively. 

Carman Pirie: I love that notion of reasons to call, like excuses to call in some way. You think account management function, whether it sits in sales or customer service, is somewhat irrelevant to the conversation in this point because, regardless of where it sits, those are, they’re busy people that have a to-do list today. And if there’s not an excuse to call, a reason to call, that kind of enters that to-do list. It’s easy to imagine how you can quickly become complacent. I assume that the customer must be doing well because they haven’t heard from them, and there’s no burning fire, so we can continue along. 

Ruth Stevens: It’s a really good point, because the salespeople are busy and so this gets their attention, but I think even more importantly, it provides value to the customer that I’m calling with some information that’s gonna help them do their jobs better. 

Carman Pirie: And I would assume that even signals that they may be seeking alternative providers would certainly be a reason to call, maybe a tough conversation, but at least it’s a reason to call. And I think most people would recognize that it’s better to begin that conversation than to be out of it just getting the advice later that you’re being switched out or what have you. 

Ruth Stevens: And in many B2B situations, those signals are extremely valuable, as you pointed out. But they’re also hard to find. What we marketers have relied on for years is the recency and a frequency of interactions. But beyond that, it becomes intel. That may not be in our database. So another great strategy is to have our ear to the ground. Keeping an eye on our competitors and what they’re up to. And the classic. Spying, if I can put it that way. 

Carman Pirie: I think the good news is for today’s marketers who are leveraging kind of account-based marketing platforms, which I appreciate is not everybody, and it’s not like they’re incredibly inexpensive platforms to implement. But for those that are, the intent data signals that can come from that. You can monitor intent for your competitors as well. If you see existing customers tripping on intent for competitors, it could be interesting to act on that data. 

Ruth Stevens: I’m really glad you raised the subject of ABM, because when that concept came along, I was in heaven. At last. We have sales and marketing and everybody else working together on a particular account, but I’m still not hearing that is getting to this retention and reactivation, and expansion approach that I’m preaching on here. What about you guys? Do you see that part of the ABM mantra or, mindset?

Carman Pirie: It certainly happens. But I think what you’re experiencing and what you’re noticing is real in that the technology exists, the capabilities are there. That’s not the problem. It’s a cultural thing. It’s an organizational, cultural thing, and that takes time to change and measurement.

Yeah. And it takes a bit of sticktuitiveness, I think, for people to stay on that path. And leadership… Yeah, I think one of the problems that we have is that  we sometimes expect the purchase of the technology to be what actually changes things. But it’s rather this intelligent use of the technology and integrating it into our culture and systems that really changes things. And I don’t know how many times people really give that its due. And I would say your, probably your critique could be put upon marketing automation technology as well. I would bet that there’s an awful lot of people listening out there that have technology that’s capable of nurturing clients in a much more robust way than they’re actually implemented.

Jeff White: Yeah. And I think the other part of that as well is that ABM platform is. Yes. As you mentioned, Carman, they are expensive, but the media buy and the media spend in order to actually leverage them at the level that they need to be in order to see success often means that there isn’t budget left for media to provide air cover for existing accounts when you’re spending all of your time trying to get lift in awareness and at the front end of the funnel, so… 

Carman Pirie: Yeah. To Ruth’s point that people are looking to attract new customers, and it’s actually diluting the effectiveness of their ABM programs.

Jeff White: Yeah. They could be making more money if they focused entirely on hitting the accounts that are already paying them. Yeah. That’s interesting. 

Ruth Stevens: You guys are making me depressed. Because really, the promise of ABM was targeted to existing customers, right? It wasn’t about new customer acquisition, as I understood it anyway. 

Carman Pirie: It’s about identifying your target accounts, and that could be both existing customers and known prospects. Certainly. But yeah, I hear what you’re saying. I’ve been engaged in an awful lot of ABM conversations, and I can’t think of one that started from the point of view of existing customers first. Yes, Ruth, you have every reason to be depressed. Look, we don’t wanna depress our listeners, however, right? Typically 

Jeff White: We try not to depress the guests either, but every once in a while. 

Carman Pirie: Yeah, so I guess that could. There’s a couple of different, when we talk about retention versus reactivation versus expansion. Those can seem three pretty close cousins.

But then sometimes when I look at it, I’m saying those are very different motions, very different skill sets required to. Retain something somebody versus expand the relationship. I’m thinking about if you called up your bank and you tell them you’re cancelling or what have you, they’ll send you to the retention specialist. My guess is that’s a different person from the expansion specialist. But are there any skill sets, mindsets that you feel need to be instilled in an organization to really excel here? And how do they differ between retention, reactivation, and expansion?

Ruth Stevens: Ah, that’s two questions. Alright.

Carman Pirie: Maybe even three. 

Ruth Stevens: So let me, I guess I should start with the second piece. We have to have metrics in place or goals meaning numbers, related goals that are pretty easy to get because unlike top of funnel where things are still pretty vague when it comes to dollars and hard metrics in this case, we have a clear idea, unless there is a distributor between us and the end buyer, that’s another matter we might wanna discuss, but it’s important to, for everyone on the account team or in the business of current customer marketing and customer expansion and so forth, to have a goal.

A financial goal and backing out of that, then I’d like to address your first question about the mindset that I think the whole team, beginning with the account manager and everyone else who’s helping, needs to understand that the there are two fundamental must-dos in current customer relationship management, and the first one is that. When we acquired them as a customer, we set some kind of expectation in their minds, and we have to deliver and likely exceed what we promised them in the first place. And if we haven’t done that, then all the tactics and cool ideas I have to share with you about retention and expansion are gonna fail.

And then the second thing is, if we do screw up, we have to have in place a fast and effective customer service function that can identify the problem, react to it, learn from it, and resolve the problem to customer satisfaction. So in many B2B companies, the people who are responsible for those two functions may not even be known to the account manager. It’s somebody over, in India, or who knows where the other side of the building, never met ’em, don’t even know that they’re, that they have something to do with my account. So that becomes a leadership and organizational issue. A cultural issue, like you said, Carman, it’s really the fundamental. must do. ’cause then the tactical stuff that I’m going to share with you, as I said before, is gonna go nowhere if those two must-haves are. Are not being delivered upon. 

Carman Pirie: I certainly do want to hear this tactical advice that you’re speaking of, but my goodness, I feel like I’ve already gotten some around your notion that this work is actually more easily measured.

You can get better revenue attribution, or at least easier revenue attribution. Then doing things like top of the funnel pipeline. Measurement and things of that nature which is inherently fuzzy. I think that’s a message that could really resonate with the senior leadership that marketers need to convince.

Ruth Stevens: Oh, there, those guys are convinced already. They I would imagine that a senior executive is communicating some kind of expectation for how much each account. Probably differentiated by certain variables, company size, industry, and so forth, but how much they expect that account to expand financially or even at the bottom line at profitability every year. And if you don’t meet those goals, you don’t get your bonus. 

Carman Pirie: Yeah. It is easy, I think, for everybody to fall into that trap, as you say, of trying to attract more top of funnel awareness than it is nurturing existing customers. And yeah, I think that more easily measured revenue attribution. That’s a really it’s good lever to pull. So what are the tactics? So let’s look in the crystal ball and say we have all the aforementioned in place. We are, we’re setting and meeting solid expectations with new accounts, and we have a bit of a screw up fixer on our customer service function that has allowed us to get by any hiccups in the road.

What are the tactics that are really going to drive success for us at that point? 

Ruth Stevens: A couple of things. The most obvious is what I call penetration marketing, which is basically cross-selling and upselling. We’re trying to get them to buy more and buy more frequently, buy bigger. That’s the classic upsell.

At McDonald’s, they want you to supersize your order, and there are lots of marketing tools that can support that. I already talked about cross-selling as a reason to cal,l where we keep an eye on buying patterns in similar accounts, and we go back to the customer and say here’s a product that we think you’re gonna need.

Another strategy is called continuous buying, or sometimes it’s called automatic replenishment or subscription, where you convince them that they it’s the type of product that’s most efficient when they have a standing order, and every month you send them a new refill of the product.

And there are many B2B categories where, especially in manufacturing that those are already in place and you can look around for more and get creative the way experts at this, like Amazon, have been doing for years. After-sales support services. Geez.

How about if you sell a package of repairs or maintenance, that’s a service level that’s billed by subscription. And our guys are ready to fly out to your factory anytime you have a problem. And it’s only gonna cost you a hundred thousand dollars a month.

I don’t know, making that up. Replacement parts are another category, just in time components. And then of course, services like financing and other categories where you can charge on an ongoing automatic basis, which immediately eliminates the sales function. Once it’s in place, it’s automatic and the onus the burden of the sale kind of shifts to the customer, that they have to cancel if anything’s gonna happen, and we get to sit back and just, let the orders go out the door. It’s a wonderful thing. So there are tactics like that if we get creative, there are ways that we can package up some of our aftermarket offerings into subscription or auto replenishment programs.

Carman Pirie: Making my head spin on how this could impact how marketers can really improve that function. You mentioned before about distributors and dealers and sometimes that can create a bit of an extra nuance around this. And I was thinking at when you mentioned that it’s yeah, ’cause co-selling with dealers and distributors, if you’re a manufacturer is sometimes difficult, it sometimes maybe don’t get into that true co-selling model, but. The marketing material that supports that channel relationship, that can, you know that those sales enablement tools that are often generated by the marketing side of the house would be a play, a key part in that.

Ruth Stevens: And also the strategy, meaning the manufacturer who is deep into this product categories know really deeply more deeply than anybody else how those products serve the market. 

Carman Pirie: How they fit together, et cetera. 

Ruth Stevens: Exactly. And can create ideas for post-sales programs that the distributors. Who are essential to cover the market that we can’t cover with our own salespeople will really benefit from. Maybe they didn’t think of it. So when we go to our distributors with programs, they’ll be thrilled to carry them. 

Carman Pirie: I was ticking on that because, when you talk about things like financing as part of a, like almost like tangential service, like thinking about a subscription model or what have you. Those are, very different things to sell.

I can imagine a technical sales person not feeling particularly comfortable with introducing the notion of financing a piece of equipment or, who knows, right? It exercises the muscle that they’re not used to exercising. Again, a good opportunity for marketing to insert itself there and give the talk track, give the material that supports that conversation, et cetera.

Jeff White: The marketer who is helping strategize different financing programs and different ways of selling and subscriptions, and all of that. It’s a bit of a different person than is probably working more on the digital side and ABM and PPC and more of that kind of front end of it.

And this may be a bit of an incndiary question, I don’t know. But do you think that marketers in upsell and account expansion roles should be compensated differently. More like a salesperson, if they’re the ones coming up with the idea of a subscription service or an ongoing service and maintenance, or whatever that is, and they’re helping sell that through, should they be compensated in a similar way to what a salesperson would be in terms of commission? 

Ruth Stevens: I think existing account marketers are already on some kind of compensation plan that includes performance bonuses of some sort… I gotta tell you guys, I am really not knowledgeable or I don’t have a lot of experience in that area. But I know when I worked at IBM years ago, we used to call, unfortunately, not in a friendly way, we would call the salespeople. Coin-operated machines. 

And in order to get them to do anything you had to provide a financial incentive. You might wanna cut that whole comment. I dunno.

Carman Pirie: I like it. It does. I mean it, it is a part of the tension, but I think it also addresses Jeff’s question a little bit around how wise it is to incentivize the marketers to be, because frankly, the way that I can imagine a comp structure that actually encourages more conservatism and less creativity on the marketing side from the account. You don’t know if a subscription model is going to work. You don’t know if the customer base is really going to embrace financing as an example, or equipment as a service versus a CapEx expenditure.

Those are things that you need to experiment with, and I think businesses ought to experiment with them, and I’m not sure. Putting the marketer on too much of a leash financially is helpful there. Anyway, thinking out loud, I just don’t wanna turn the marketer into the coin-operated machine. 

But we won’t cast aspersions on your time at IBM at all. Ruth, it’s been a pleasure to have you on the show. I wonder, as we come to a close here, what’s the biggest thing around the corner, the thing that you’re seeing in the future of marketing and sales that is either going to dramatically enable your vision for retention, reactivation, and expansion, or is going to stand in the way of it? I’d be curious, just what are you seeing? Is this an idea that’s going to catch on even more, or is this going to continue to be something you feel like you’re pushing uphill?

Ruth Stevens: The easy answer is AI. That’s the universal answer to that question today. But the question of whether traditional B2B companies. Are going to be thinking these kinds of marketing thoughts remains to be seen. I thought with ABM that we were on the path to glory.

I also thought that with digital marketing, it’s typically the marketers who have more experience. In the digital world than salespeople that we were headed in that direction. But as you guys pointed out, it’s really a cultural matter, and I would add, it’s a leadership matter and the senior executives that I know in industrial companies tend to come up through sales.

And they’re not thinking marketing thoughts. So that doesn’t bode well for my little proselytizing here. But that’s the reality. I sometimes say in B2B, sales flies the plane and marketing serves the coffee. Because that’s traditionally been. The help meet role that marketing has provided, but that has changed too. With the arrival of the internet, the arrival of data the comfort level of the buyer with digital, we all know how the buying circle in industrial businesses is dominated by younger people for whom digital communications are just a matter of fact. And it’s typically the marketers who have the most experience in that area. I remain hopeful. 

Carman Pirie: I do as well. Ruth, thank you so much for sharing your expertise with us today. It’s been just a delight to have you on the show.

Ruth Stevens: It’s been a pleasure. Thank you both. 

Jeff White: Thank you.