When budgets get tighter, marketing and sales teams are left with the task of doing more with less.
During times of economic downturn, achieving greater efficiency becomes a gigantic priority. Many companies are reducing spending, raising questions about where to put time and resources.
The good news is that despite the inherent challenges of less budget, these teams can work together to become more resourceful and find creative solutions. It all comes down to finding common ground to pursue strategic targets and investing their efforts to yield positive returns.
If you missed the webinar, this article covers some of the highlights of their conversation and some actionable strategies to boost retention and expansion.
The challenges of finding balance
A big question on the mind of companies and their revenue organizations involves where to prioritize their efforts to either acquire new customers or retain and expand relationships with existing ones. Unfortunately, it’s a complex and nuanced question with no one-size-fits-all answer.
Balancing these three areas in revenue management largely depends on a company’s maturity level. Conventional wisdom indicates that high-growth startups are primarily concerned with acquisition, whereas later-stage companies focus on their existing customer base. But as some industry experts suggest, companies may miss huge opportunities if they emphasize one of these areas too much.
It’s also worth considering that Ehrenberg-Bass, one of the most reputable marketing research organizations, published a study that suggests new user acquisition is a more reliable growth strategy for B2B companies than customer loyalty.
The costs of acquisition, retention, and expansion
In a time when everyone is spending less, it’s critical to ask whether it makes sense to invest more heavily in acquisition than retention or expansion. These areas require different resources and costs, and might not drive the necessary revenue growth. In the webinar, Mike Weir of G2 gave his perspective on the differences between each.
Acquisition is very costly. Pursuing new customers encompasses a lot to see positive returns. The heaviest costs involve data, media spend, and production costs for generating content and creative. Additionally, consider the investment of time necessary for BDRs, Account Executives, and other sales team members.
Retention is less costly than acquisition. Excluding customer success and sales team personnel, retention can have significantly lower costs than acquisition.
Expansion has relatively fewer costs than retention. With some assistance from marketing, Relationship Managers can partner with customer success to find new opportunities with customers who love your product.
Understanding your place in the market
All companies have unique circumstances and inputs that can impact the decision to invest their efforts. Mike Weir thinks that one way to determine which areas to explore involves understanding your position in the marketplace.
While customer acquisition will always remain a priority for revenue organizations, Mike went on to talk about what the Ehrenberg-Bass study doesn’t reflect. As brands grow their reputation and awareness in the market, buyers are naturally more open to learning about your solutions and ultimately buying from you.
Questions to determine the right balance
At one point in the webinar, Bryan Law of ZoomInfo shared his perspectives on what considerations can help companies determine areas of revenue growth to prioritize. The following are key questions to ask to help get those conversations going.
As a company, what stage of growth are you in?
What are your strategic priorities?
What does your customer base look like?
Are you in a fairly mature or more nascent market?
Strategies to achieve greater retention and expansion
Your situation might deem acquiring customers a necessity. However, due to recent economic uncertainty, in addition to an already complex buying process, many companies are exploring how they can reduce churn and build upon good customer relationships more than ever.
Pursuing new customers can only go so far with limited resources, and it’s essential to understand how to grow customer revenue. The following are several strategies straight from revenue and marketing experts to help improve retention and expansion efforts.
1. Reaching for greater sales and marketing alignment
Preaching the importance of sales and marketing alignment isn’t groundbreaking. Many industry experts and thought leaders often tout the benefits of alignment as an essential framework for companies to achieve business goals and remain competitive.
Everyone talks a good game about alignment, but the reality is that few B2B organizations feel there’s a strong alignment between these teams. At one point in the webinar, Bryan stated that many revenue inefficiencies lie in that disconnect between sales and marketing.
When you break it down, alignment is about mutual understanding. Marketers need to understand the goals sales are aiming for, and sales need to understand what marketing can realistically achieve with its allotted resources.
Dialing in on the right metrics
In terms of what drives the decision to invest in acquisition, retention, or expansion, Mike talked about two concepts that are extremely important to track to set the right expectations and drive desired outcomes.
Efficiency metrics: These metrics can involve looking at how much revenue an Account Executive could produce, how many customers can a Customer Success Manager support, among others.
Conversion metrics: These can pair nicely with efficiency metrics to understand performance across the whole funnel. If you’re not tracking each point of conversion, then you are impacting your efficiency and spending way more.
2. Embracing the voice of the customer
As mentioned earlier, greater brand awareness and recognition in the market make buyers more open to researching your offerings. But getting to that point where you become a leader takes time and consistency.
To help mitigate the challenge of achieving greater brand awareness, the voice of the customer can be massively impactful in creating stronger messaging and establishing a foundation for positive market sentiment. What’s even better is that utilizing the voice of the customer can positively affect acquisition and expansion efforts.
“If you're thinking about customer success in a really good way, then you take that solid base of happy customers and empower them to speak on your behalf,” says Mike. “I think one of the most important things to bear in mind is that buyers talk among themselves and educate each other on who is the right company or solution to consider.”
3. Paying attention to the signals around intent
Despite its utility and strength as a tool for having a meaningful impact throughout the funnel, many organizations struggle with operationalizing intent data to its fullest. We know that G2 Buyer Intent data can drive significant outcomes and target buyers at precise moments, but many might not realize that this data can go far beyond acquisition.
Avoiding churn and building on relationships
Another key aspect of sales and marketing empowering one another is creating multithreaded relationships with buyers and customers to understand what’s turning customers away and how you can build upon good relationships.
To aid in this, Mike and Bryan discussed how certain intent signals could help identify these opportunities.
Researching competitors & alternatives: With this intent signal, your team will want to begin conversations with these customers that can shed light on what challenges they’re facing or where your solution isn’t providing the value they need. You’re better off addressing the chance of churn if you can prepare well in advance. This can be precious information to have around renewal time.
G2 Profile visits & category visits: Let’s say you have an established relationship with a company with offices all over the globe. You receive an intent signal notification from their San Francisco office that someone researched your G2 Profile, but it’s not from the New York office where your contacts work from. By connecting this information with Relationship Managers, you could discover an opportunity to expand and engage stakeholders in that other office.
4. Mastering engagement and delivering value
When it comes to engaging customers, getting it right is a delicate balancing act. For example, it’s becoming increasingly common that delivering a business outcome requires engaging more than one customer contact.
Ultimately, your goal is to solve the problem your customers and buyers have. Regardless of whether you have a solid relationship, they need you to deliver value.
“Sometimes, it's challenging to make our customers successful when we don't know what success actually means for them,” said Bryan. “Being in those conversations to understand the key priorities for those businesses is necessary to deliver the value you want.”
Since minimizing risk is a component of retaining customers and finding expansion opportunities, mastering engagement with the right rhythm is crucial.
Finding revenue growth during economic pullbacks
Balancing priorities across customer acquisition, retention, and expansion can be a tough nut to crack. Finding the right mix between these areas requires understanding your position in the marketplace, how you’re delivering value to customers, and exploring which investments will yield the best opportunities with limited resources.
Acquisition is important, but costly. Tighter budgets may dictate other revenue opportunities, and dialing in on efficiency and conversion metrics can shed light on which might work best. Expansion and retention require less spend to grow NRR and existing customer revenue.
Multithreaded relationships can drive better outcomes. Since more than one person ultimately uses a given software, consider how all these stakeholders play a role in identifying challenges, education needs, or delivering more value.
Intent signals can help reduce churn or uncover expansion opportunities. By utilizing intent data, these signals can give valuable insights into whether a customer is considering competitors or if there’s a chance to build upon an existing relationship.
Stephen Hoops is a Sr. Content Marketing Specialist at G2. He focuses on creating content that helps tech industry sales professionals and B2B SaaS marketers find success with G2 products such as Buyer Intent, Review Generation, and more. After receiving his B.A. in Journalism from West Virginia University in 2013, he has helped countless B2B brands reach new highs through content creation and SEO. When not nerding out about the artistry behind well-written copy, Stephen can be found info-dumping about homemade cocktails, Italian cuisine, and why vinyl is the superior physical medium for music.
Achieve greater retention and expansion goals with key data.
G2 Buyer Intent data can be a game-changer to help reduce churn and discover expansion opportunities with happy customers.