Nearly 82% of companies surveyed believe customer retention is more cost-effective than gaining a new customer, and research shows, you probably know it by now, that it costs five to 25 times more to acquire a new customer than retaining an existing one. Investing in your existing customer base pays off. Statistics from a study by Bain & Company, report that improving customer retention rates by just 5% increases profits from 25% to 95%. Similarly, loyal customers spend about 67% more with brands than new customers.
Customer retention is the key to a sustainable and profitable business, and a product marketer is the person who drives the results. A product marketer interfaces between customers, your sales team, and the product team. 85% of companies see the importance of the role and are already investing in product marketing. In this article, we’ll examine the responsibilities of a product marketer and the role he/she plays in the retention ecosystem.
Find Out What Your Customers Think
Simply guessing or assuming what your customers need is a great way to lose customers. Customer feedback is essential to ensuring customer retention. Companies that invest in customer feedback programs increase customer retention rates by 55% and have an average 23% decrease in year-over-year customer service costs.
Product Marketers gather customer feedback and respond to your market, build brand loyalty and prevent customers from churning. Specifically, a product marketer gets to know your most profitable customers and pours through their data to find out what they value, their perception of your services, and uncovers unmet needs.
Their role entails collecting customer insights and synthesizing them into digestible information, propelling the development of new features, or improve existing ones to drive customer loyalty. Knowing what your current customers think about your products is key to customer retention, and it’s the product marketer’s responsibility to ask the right questions.
Develop Value Proposition
Your value proposition could be the difference between another face in the crowd or standing out. 69% of B2B firms have established value propositions, yet 54% of companies don’t optimize their value propositions.
If your company doesn’t have a clear and strong value proposition, you need a product marketer to help you define, deliver, and communicate what your product can do for customers. One brand that uses its value proposition to build customer retention is Walmart.
With bargain shoppers as their target audience, the retail brand’s value proposition— save money and live better—focuses on minimizing costs and low-priced items, which continuously create value for consumers. inMarket’s Spring 2017 Loyalty report estimates their loyalty score at 2.68, while Nine West has a score of 1.23. Sharp value propositions help you achieve greater focus, increase value, build relevance, and strengthen your relationships with customers.
Enable Sales To Sell To Existing Customers
The average customer spends 67% more in the third year as a customer than in the first year. When surveyed, 71% of marketers chose sales enablement as one of the activities where they invest the most time. Here’s how product managers help their sales team and drive retention.
Training: Many deals remain unclosed because sales reps can’t communicate with customers adequately and efficiently. Research from Forrester states that 77% of executive buyers claim salespeople don’t understand their issues. A product marketer trains your sales team on your brand’s positioning, what sets your product apart and educates them about how to talk about your product in an authentic way that so that they can engage and retain customers.
Content Creation: To empower your sales team, your product marketers should create sales materials such as case studies and product videos that speak directly to customers at different points of their journey. 65% of B2B content goes unused, but product marketers teach sales team when and where to use the content. By teaching your sales team about the ins and outs of your product, product marketers drive retention and increase your average customer lifetime value (CLV).
Gather Competitive Intelligence
In 1958, corporations listed in the S&P 500 had an average stay of 61 years. Fast forward to 2011, numbers from research firm Innosight reveal that the average stay dropped to 18 years. At the present rate of churn, Innosight’s research estimates three-quarters of today’s S&P 500 will be replaced by 2027. Research also shows that since 2000, 52% of the Fortune 500 have disappeared.
While companies rise and fall for many reasons, one way to avoid extinction is to keep your eye on your competition. According to the 2018 State of Market Intelligence Report, product marketing was most cited as participating in the research phase of competitive intelligence by 29% of respondents.
Product Marketers conduct competitor research to understand which features are must-haves for customers to buy or switch, and identify your competitor’s strengths and weaknesses. For instance, by starting a dialogue with your competitor’s customers, product marketers can decide what features of competitors products should be incorporated into your own.
Customers will only stay loyal if a product’s price meets their expectations. To keep your pricing “loyalty friendly,” product marketers conduct competitive analysis to see how top competitors price their products and what figures customers think is fair. This ultimately helps you price in a way that’s mutually beneficial for both you and your customers. Using competitive intelligence, a product marketer can tell you what your competitors are doing, and where you need to focus to ensure current customers stay happy and drive your business forward.
Create Educational Content
Two-thirds of consumers prefer content marketing that educates and informs them about a subject or product. However, content isn’t just for landing new customers. You need content to retain existing customers. Here’s how a product marketer can help drive retention with educational content.
Since a product marketer can access customer data, they’re able to provide intelligent marketing that will educate your existing customers on added features, new products or upgrades. For instance, by monitoring how customers interact with your product or service, a product marketer can identify which features are underutilized and know where training is needed most.
The act of educating customers not only strengthens your customer’s businesses but also leads to customer retention. Take a look at Widen, a digital asset management company. Widen uses its educational arm Widen University, to help customers master the complexities of topics like metadata, governance, and analytics through training and webinars. The company attributes its customer retention rate of greater than 96% and other marketing KPI growth in part to the educational efforts.
If customers don’t recognize the value of your product, they won’t stick with you for long. Get a product marketer to ensure you have a strong strategy that educates customers on how your product and services help them meet their business goals.
In a world driven by competition, a product marketer has a big role to play in keeping existing customers happy. A product marketer has the power to help you stand out in a sea of lookalikes, and elevate your brand to a household name. When picking a product marketer, look for someone with a basic understanding of finance and business operations, a passion to solve problems and an ability to collaborate with different teams.