At the risk of stating the obvious, the most important thing you can do for your business is develop loyal customers. Reducing customer attrition is one of the most significant yet challenging goals for any business. While this is by no means novel information, many businesses take their customers for granted and are left stricken and shocked when a customer leaves for a competitor or for unstated reasons.
Customer relationships can be like marriages. In the beginning of the relationship, it is easy to appreciate each other. But after several months or years, the honeymoon period ends, and it is up to the company to keep that spark alive through creative measures. Many customers leave because something is missing or lacking; there is a disconnect, and the customer feels that the company does not truly understand its business. Fortunately, this issue can be corrected by gaining a deeper understanding of your customers' purchase behavior—what they buy and how their spending patterns change over time. Business-to-business purchase behavior insights are the secret sauce to client retention; such insights provide critical data that can help businesses know their customers better, sell more, and avoid revenue-threatening surprises.
Think of purchase behavior insights as new fuel for B2B customer relationship management. By looking at a company's overall purchase and payment behavior, organizing the available clues about its business, and taking action based on the story told by the clues, companies can better serve their B2B customers by gaining deeper insight into their business. Acutely knowing customers' purchasing behaviors, past and present, enables any company to anticipate what and when their customers are likely to buy in the future. By understanding purchasing patterns, companies are positioned to build customer loyalty by knowing where and how existing customers are moving and capitalizing on such information.
One of the best ways to improve customer relationships is through personalization. Armed with purchase behavior insights, you can clearly see what is going on within your customer's organization and tailor your message accordingly. Knowing if your customer is growing, in financial retreat, or changing business direction can help you alter your communication and match your product or service to its needs. If a company notices a customer is growing, it can use that as an opportunity to deliver smarter pricing. For instance, tell the successful customer that you recognize her company is growing fast and that you want to work out a plan of reducing rates over time on a unit basis based on the growth projections seen. And just like that, you've created a customer for life. By simply adjusting the pricing terms to fit that customer's specific growth plan, you have locked that client into something longer term. Forecast its needs and understand what it needs to accomplish next. And in the process, that customer will be flattered you took the time to research its business and recognize its success. You are personalizing that relationship and creating lasting stickiness with that customer. And the spark reignites.
When you turn your customers into enthusiastic fans, you are positioned to upsell more effectively. Upselling is a matter of piecing together the clues about the customer and using that information to predict its next moves and spot opportunities to expand the relationship. The key is to act quickly. Meteorologists predict the weather not so they can know it is raining, but so their viewers can plan for rain before it happens. Purchase behavior insight enables companies to do the same with their customers. This insight helps companies identify early signs of a customer's financial troubles and take the appropriate action before reading the article about that customer going out of business. It is a matter of predicting the future based on accurately reading past and present conditions. Identifying growth in key purchases made by your customers can tip you off to significant opportunities you should act on. That way you can focus your time and energy on the customers most likely to spend more with you rather than those that aren't.
Keep that spark alive and strong. Know your customers, predict their next steps, and serve them better. When you do this, you will enjoy a lasting, mutually beneficial business relationship.
Jim Swift is CEO of Cortera, a provider of comprehensive business-to-business payment and purchase behavior insight on public and private companies. The company tracks $1.6 trillion in business-to-business purchases across 45 spend categories to deliver insights on more than 20 million U.S. business locations.