Why is it so difficult to retain and grow hard-won accounts? Not because of a lack of talent or ambition in a company, but because of a lack of alignment between those responsible for revenue growth.
Why customer retention is so important in contract manufacturing
With high-value and slow-burn sales opportunities, the process of winning manufacturing accounts can be long and arduous.
On the other hand, retaining accounts (and growing them) can bring increased value to a business, at a fraction of the cost of drumming up new sales:
- According to the Harvard Business Review it’s up to 25 times cheaper to retain a B2B customer than to attract a new one.
- Bain & Company says improving customer retention rates by just 5% can increase profits by 25% to 95%.
Still, retaining customers can be hard.
What happens to all your leads after they become customers?
It’s easy to lose sight of customers in your CRM once a deal has been closed. Prospects who were so carefully nurtured before they signed on the dotted line, can often fall off the radar when it comes to business development.
As your attention shifts to delivering services against tight budgets and timetables, you may have less time, energy and resources to spend nurturing newly acquired client relationships - with consequences that only become obvious later on.
What just happened?
A year or two after signing a new client, your sales figures may tell a story of failure to grow revenue - or loss to competitors - that simply wasn’t obvious while it was happening. With hindsight you may see upsell opportunities that went untouched or cross-sell opportunities that were ignored. But by then it will be too late.
Who’s to blame for poor retention rates?
Customer retention and revenue development is hard. If you can’t keep hold of clients - sales can blame customer service for losing hard-won business. Customer service can blame sales for over-promising in their initial pitches. Marketing can blame sales and customer service for not delivering long term returns from their successful demand and lead generation.
How to fix it
But the reality is, the reason for failure is often shared and systemic. Without the right kind of alignment between sales, marketing and customer service - and the right kind of tech stack in place - customer experience can be fractured. Hand-offs between teams can be messy. Deciding the right level of post-sales support and sales development can be hard.
Why RevOps is the answer
RevOps brings the three teams responsible for end-to-end revenue generation together, to create the digital systems and processes you in place need to report on and optimise customer experiences.
How to Design a Customer Retention Strategy with RevOps
Step 1: Map your existing process
You can’t begin to understand where the omissions and gaps are in your process, unless you understand what’s happening right now. And everyone from across your organisation should be involved in the process, because only they will know the intricacies of customer behaviour at each stage of the lifecycle.
It might be messy, but it’ll be an important tool for isolating the moments where you risk losing customer confidence and engagement.
Mapping the customer journey within the RevOps framework involves identifying every touchpoint a customer has with your brand, from the initial contact to post-sale support. This map should detail the customer’s experiences, pain points, and needs at each stage, providing a clear view of where improvements can be made to enhance retention.
Step 2: Implementing your new post-sales approach
Once the existing customer journey is mapped, the next step is to map out the new customer journeys and processes that should govern your post-sale relationships.
RevOps can work out how to automate and orchestrate the perfect balance of targeted account support and prospecting for new opportunities, that will delight your customers and keep accounts growing.
These are the personalised Accounts Based Experiences that make for long term relationship building
Personalised communications
- Utilise client data: Use insights into your clients’ specific outsourcing needs, whether it's for PCB assembly in electronics or chemical formulation in pharmaceuticals, to personalise your communications and offers.
- Dynamic content: Implement dynamic content in emails, updates, and technical documentation that directly addresses the unique requirements of each client. For example, provide tailored support documentation or process optimisation tips based on the specific services they've outsourced to you.
- AI-Driven maintenance suggestions: Use AI-powered tools to predict equipment maintenance needs and suggest timely interventions, minimising disruptions for your clients' outsourced production processes.
Proactive outreach
- Identify key milestones: Recognise crucial milestones in your clients' outsourced projects, such as production ramp-ups or project completion phases, and use these as opportunities for targeted communication.
- Automated triggers: Establish automated triggers for milestone-based outreach, like notifying clients when equipment servicing is happening or when production capacity can be optimised.
- Operational health checks: Offer regular health checks to pre-emptively address potential issues that could impact the outsourced work. This proactive approach ensures smoother operations and helps clients avoid costly delays.
Educational content
- Comprehensive knowledge base: Develop an in-depth knowledge base covering aspects like best practices in outsourced manufacturing, maintenance procedures, and industry regulations. This can include tailored content for different sectors such as electronics, pharmaceuticals, or aerospace manufacturing.
- Video tutorials and webinars: Create educational resources that demonstrate advanced techniques or new features of your manufacturing capabilities. For example, offer webinars on the latest trends in electronics manufacturing or tutorials on the benefits of advanced material usage in contract packaging.
- Customised onboarding: Implement a detailed onboarding programme to help new clients fully understand and utilise the services you offer, maximising the value of their outsourced partnership with you.
Regular check-ins
- Scheduled touchpoints: Set up regular touchpoints aligned with the client's project timeline to discuss progress, address concerns, and explore potential improvements. These check-ins can be particularly valuable during critical stages, such as the initial scale-up or quality assurance phases.
- Quarterly business reviews: For major clients, conduct in-depth reviews focusing on how your services have added value, improved operational efficiency, or contributed to cost savings. Highlight success metrics and discuss potential areas for further collaboration or service enhancement.
- Feedback mechanisms: Use surveys and implement a voice of the customer programme to continuously collect feedback on your service quality and how well you’re meeting their outsourcing needs.
Cross-sell and upsell opportunities
- Analyse service utilisation: Review how clients are using your services to identify opportunities for additional offerings. For instance, if a client outsourcing PCB assembly might benefit from additional design services, provide recommendations based on their current use case.
- Equip your sales team: Train your sales team on the full range of services you offer, ensuring they can make informed suggestions on complementary solutions that align with the client's business goals.
- Predictive analytics: Employ predictive analytics to suggest relevant upgrades or additional services, such as advanced quality control systems, at optimal points in the client's project lifecycle.
Customer advocacy
- Identify advocates: Look for clients who have had significant success with your outsourced services and nurture them as potential brand advocates. These clients can help enhance your reputation through testimonials or participation in case studies.
- Develop case studies: Create detailed case studies showcasing how your services have driven success for clients, highlighting improvements like increased production efficiency or cost savings. This is especially impactful in sectors where quality and reliability are paramount.
- Referral programmes: Implement referral programmes that offer incentives for clients who bring in new business. Tailor these programmes to the unique context of B2B manufacturing, making them relevant and attractive to your clients.
By implementing these tailored strategies, contract manufacturers can offer a more seamless and valuable experience for clients outsourcing their production needs, building stronger relationships, and fostering long-term client retention and growth.
Step 3: Identify KPIs and automate reporting
The RevOps approach depends on building the reporting systems that can help you monitor and optimise the success of your strategy.
With the right CRM system in place your team can jointly agree the KPIs that will define success.
- Churn rate: The percentage of customers who stop using your product or service during a specific period. A lower churn rate indicates higher retention.
- Customer Lifetime Value (CLV): Represents the total revenue anticipated from a customer over their relationship with your business. It helps in understanding the long-term value of retaining customers.
- Net Promoter Score (NPS): Measures customer loyalty by assessing how likely customers are to recommend your product or service to others. High NPS scores correlate with better customer retention.
- Customer Satisfaction Score (CSAT): Measures overall satisfaction with your product or service. Higher CSAT scores typically indicate that customers are more likely to stay.
- Retention rate: Indicates the percentage of customers who continue to use your product or service over time. A higher retention rate is a clear sign of success in keeping customers.
- Repeat purchase rate: Tracks how often customers make repeat purchases, signalling their loyalty to your brand.
- Renewal rate: Measures the percentage of customers who renew their subscriptions, a critical metric for subscription-based businesses. A high renewal rate suggests strong customer satisfaction and retention.
- Customer health score: A composite metric that considers factors such as product usage, customer interactions, and feedback, providing a comprehensive view of a customer’s relationship with your brand.
- Net Revenue Retention (NRR): A key metric that measures the percentage of recurring revenue retained from existing customers over a specific period, including upsells, cross-sells, and churn. A high NRR indicates not only customer retention but also revenue growth from your existing customer base, making it a critical indicator of long-term business health.
Using these KPIs and sharing reports in regular meetings you can tweak and optimise your tactics and strategy to improve performance over time.
Designing your customer retention strategy with RevOps ensures you are using all the insights from across your business to create extraordinary post-sales experiences. And with all the data that you gather as part of that process, your team have the foundation to keep optimising and improving performance over time.
