Retention vs. Acquisition: Marketing from Beyond the Sale
It’s tough to find solid evidence for an exact number but, when it comes the notion that customer retention is cheaper than acquisition, many experts lean on the ratio of 6:1. While it’s tough to solidly corroborate that number, it is generally agreed on by veteran marketers that it is significantly cheaper to retain a customer than to go out and get a new one. This is especially true as sales cycles continue to extend, and teams continue to grow. New customers just don’t come easy.
Kevin Spurway, CMO of Appian, a platform for building enterprise software, might actually have the numbers. This makes sense, as he’s devoted much of his time to perfecting what he has dubbed “post-sale marketing.” Spurway even has a dedicated team for engaging customers after they’ve purchased the solution or, to put it into terms an investor might go for, “net revenue retention.” In the highlights from Kevin’s interview with Drew Neisser on Renegade Thinkers Unite, you’ll see how much effort goes into getting to know Appian’s customers, and how worthwhile the efforts are—retention truly pays off. To hear the full interview, click here.
Any creative marketing taking place at Appian?
At Appian, we tend to deeply cultivate our customer relationships. Our customers are incredibly important to our overall organizational success, of course. But we’ve placed extra focus and attention on those customers on the marketing side of things. I think one of the most interesting things that I’ve done was to create a structure within the marketing department for a person who is entirely focused on post-sale marketing. So, marketing directly to our customer base and coordinating with other aspects of the Appian organization to create a customer experience that marketing impacts.
Can you expand on post-sale marketing?
Well, we’ve got a fairly senior person in charge of and dedicated solely to post-sale marketing, and she’s built a great team of six people. As far as identifying what success looks like in our program, it’s a little bit tricky for us to capture customer satisfaction metrics, though we do survey our customers at various points along the way. We actually just completed a buyer voice survey which gave us some interesting insight into how our customers think about us, and how they perceive our value in the organization. But the primary goal is to drive both renewals and new projects within customers and the way that we measure that as an organization is through net revenue retention, which is the Wall Street financial number and we tend to have excellent net revenue retention.
How’d you execute your customer voice survey?
We actually contracted with a third party to help us with an independent analysis of what our customers are thinking, and the intention here was to understand how they perceived Appian, what their thoughts were in terms of how we fit within their organization and their perception of our value and how we were differentiated. We wanted to understand how our message resonated with them, the positives and negatives of that. Having a third party do it also gave it a level of independence that enabled us to look at things differently, with a more studied perspective. It was also both quantitative and qualitative, which was crucial.
Did it reveal anything?
Sure. One of the things that that came across really strongly for us in the survey was that getting customers to like us really came down to our people. It’s about the people that they engaged with through the initial process of purchasing the Appian solution, it’s about the people that they worked with on the ground to actually implement a project, and on an ongoing basis, the people that they continue to engage with in Appian, and whether it’s support, whether it’s the people on the marketing side, with our global events et cetera et cetera. It was all about the fact that the people experience of Appian is very good. I think that’s interesting for me, as that’s something that tends to get lost, too often marketing will focus very much on product and technology.
How did this change your customer engagement approach?
Well, our efforts have to really build on this idea of creating connections with people. Our marketing organization is responsible for is celebrating the success of the customer, which is a great area to do that. So once that implementation is done, we do an event called a “Lego Go Live” where we actually, at a nice dinner event, award the customer with a customized Lego sculpture created by a master Lego builder that reflects some of the unique attributes or values or identity of that particular customer. And we turn this into an event. It’s a good opportunity for the project team that’s worked on that implementation to engage and bond with the customer. Sales gets involved in it. And it’s really a special aspect of how we develop that tight connection with our customer and celebrate their success.
Besides upgrades or renewals, are there other benefits to post-sale customer engagement?
We’ve put a lot of focus and emphasis on getting our customers to tell their stories. One of the best ways to explain Appian is to rely on our customers to explain our value for us, to tell their story that’s specific to their industry or specific to their business problem and how they’ve applied Appian to actually solve that problem. To do that, we have to prioritize building relationships with the customer at several levels throughout the organization. It’s great to have the senior relationships, the executive level relationships, and we strive as a company to build those, but it’s also important to build the relationships with the people who are actually the direct practitioners. So we’ve got dedicated programs that target each of those things. We also have a couple of people who are dedicated specifically to customer marketing and customer stories. So helping our customers primarily through video testimonial, but also through other mechanisms whether it’s a presentation at Appian World, our annual user conference, or webinars, or case studies, or whatever. We have resources that that not only help them help our customers create the artifacts, of the communication but also work with them to build relationships and encourage them to actually participate. Beyond that, we really just took time to consider what the customers are saying, and sort of adjust all of our messaging and activities to lean into what we see resonating.
Do you have two dos and a don’t for other marketers out there?
Do take the time to really understand what your customer experience is. How does their experience as a customer unfold? What are the major touch points? The major and minor milestones? And then, how can we create some level of consistent experience across those? And then how can we leverage those major touch points, those major milestones. That’s how we got things like our “Lego Go Live.” The next “do” is: do this properly. You need people who are focused on it. I think when you when you start bringing those couple things together and putting a building program around those two ‘dos,’ those aspects, then you can start to get more focused on the next questions. How do you extract value from that set of initiatives by creating demand, or how do you go about reinforcing or accelerating sales processes that are already in the works?