Higher Logic CMO Hunter Montgomery shares his take on the importance of building and nurturing online communities.
Cold calling and networking referrals vs. loyalty and upselling – this dichotomy presents an important choice for the sales community. Sales professionals dutifully spout the fact that customer acquisition costs are five times higher than retention costs, but too many are walking right past an upselling goldmine without even knowing it.
There’s a host of tools and services to support the delicate balance between annoying and retaining customers in an attempt to leverage existing customers. Compared to new customers, they are 50% more likely to try new products and they spend 31% more. With all the attention on social media listening, mobile messaging, loyalty marketing and the like, one of the most powerful – yet surprisingly overlooked – tools that enables sales to listen and engage with customers is the online community.
In Leader Network’s recent study, The Business Impact of Online Communities, companies ranked customer retention as the most important aspect of their digital program. A big part of those digital programs are companies’ own online communities. These communities are great sources for companies to improve marketing, operations and customer service. According to the study, 92 percent of marketing and community leaders say their online community has an impact on the organization. But as a customer retention and upsell channel, they are an underused resource, with marketing and community leaders struggling to connect the dots between revenue and online communities. And while well over half of the sales, marketing and community leaders interviewed reported that “competitive advantage” delivered by communities ties back to customer retention, barely a third of them could measure and report on the quantifiable financial and competitive benefits that online communities deliver.
Don’t let this “ear to the ground” resource fall into the same trap at your company. Here are five tips for leveraging your online community as a sales channel that delivers a competitive advantage:
- Communities are powerful listening channels so be sure to tune in and turn up the volume. Online communities are gold mines of information about your market, your customers, and everything else you’d want to know. The sales team might not be running the communities, but that doesn’t mean you can’t leverage them to up your game. Use them as a first step to market and customer research. It doesn’t have to be a time-consuming process. For example, you can check in once at the beginning or end of the day, or you can review all of one customer’s activities before your next call or meeting. I know sales executives who have gleaned valuable information from online communities that they wouldn’t have heard elsewhere – everything from learning about budget cycles and staff changes to technical problems. According to the White House Office of Consumer Affairs, on average, loyal customers are worth up to 10 times the value of their first purchase, so be sure to spend that same time ratio working to get to know them better.
- Seth Godin once said, “Don’t find customers for your products, find products for your customers!” Online communities are a great way to do this. Where do people first go when they encounter problems and are seeking advice? They talk to their peers, and today they often go straight to their network to understand and resolve technical issues and related business challenges. Check in with your teams that are monitoring the online communities to see which issues are coming up over and over again. This can lead to opportunities for sales to promote upgrades and new products to solve these very issues. Do this before making a call on your client. The worst thing for a salesperson is to call on clients without realizing they are unhappy. Consider the online community part of your due diligence before in-person or phone check-ins with your customers. Remember that 80 percent of your company’s future revenue will come from just 20 percent of your existing customers, according to Gartner. Keeping them happy means staying one step ahead of their needs.
- Pay attention to bottom line opportunities. Identify cost saving opportunities during customer discussions. Are they grumbling about having to purchase multiple products when a combined offering would do the same trick and save money? Those are the times to jump in and identify products that customers might not know about.
- According to Forrester, “In this age of the customer, the only sustainable competitive advantage is knowledge and engagement with customers.” Striking the right balance when engaging with customers is so important to your ongoing relationship. It’s crucial not to use online communities as a one way street. You don’t want to go in, grab information that’s useful to you, and then be off. Communities thrive on participation so strike the right tone as a member. In addition to regularly checking on customer activity, participate. Don’t just lurk and then strike when you see an opportunity. Become a known and trusted source of information.
- And then…when the timing is right, let your services and products be known, but be mindful and use this approach sparingly – don’t overdo it. For example, if you see that a certain customer has posted about a specific issue more than once, bring that up in conversation with them next time you call on them. Or find out which communities or discussion threads your clients are joining. If they seem to be researching categories they haven’t already used, bring that up with them. And of course, sometimes clients post to their community about specific products they are interested in trying. Don’t be shy about jumping in to offer your support. Remember what Steve Jobs said: “Get closer than ever to your customers. So close that you tell them what they need well before they realize it themselves.”
Hunter is a highly accomplished global marketing executive with over 20 years of experience in the management and leadership of marketing and business operations. Hunter has spent a majority of his career in the high-tech industry where he has successfully lead marketing efforts through start-up, survival, turnaround and growth modes. Hunter graduated from Colgate University where he earned a BA in History and earned a MBA from The University of Texas at Austin.