This article comes from Alain Mowad’s talk, ‘Leveraging customer loyalty & expansion to beat the competition & grow the business’, at our Las Vegas 2023 Customer Marketing Summit, check out his full talk here.
Do your customers love using your software, yet fall short of realizing its full potential? Do you struggle to achieve contract renewals and expansions year after year? You're not alone.
In today's climate of skyrocketing expectations but plummeting loyalty, driving sustainable growth is harder than ever. Churn threatens revenues, while unused product capabilities represent missed expansion opportunities.
Trust me - I've faced these hurdles myself.
As the Senior Director of Product Services and Technical Marketing at Talkdesk, customer loyalty and expansion are my obsession. Talkdesk is a contact center as a service provider and a full stack solution for enterprises to deliver modern customer service.
We offer everything from omnichannel engagement, customer experience, analytics, self-service, workforce engagement, and employee collaboration for back-office staff. We’re truly AI-powered!
Over the years, I’ve learned a few tricks, often through trial and error, on how to inspire customers to fully adopt capabilities, renew contracts, and expand spending.
So today I want to share actionable takeaways to help you nurture loyalty, boost retention, and grow wallet share - while avoiding pitfalls I’ve experienced.
Ready to turn your users into passionate brand advocates who buy more each year? Let’s get started.
The challenges of earning loyalty today
The bar for earning customer loyalty has never been higher. The pandemic accelerated changes in buyer behavior, especially among younger demographics, making it easier than ever for customers to switch brands after just one bad experience.
Consider these alarming statistics:
- 32% of customers will leave a brand they love after a single negative experience.
- 15% will do so after multiple bad experiences.
- 57% of Gen Zers are less loyal to brands now than before the pandemic.
The generations driving these changes in loyalty - Gen Z and millennials - now make up the majority of the workforce.
So the same attitudes are shaping B2B buying decisions, with customers feeling empowered to churn if vendors don't continually wow them.
At the same time, the SaaS business model has dramatically lowered switching costs. With enterprise software, customers invested heavily upfront in implementations and integrations. They became trapped - unable to leave without massive disruptions.
SaaS flips the script. Subscription pricing means smaller, recurring investments. Cloud delivery and APIs make integration easier. While contractual obligations still exist, it's simpler to swap one SaaS provider for another over time.
Between generational shifts and SaaS flexibility, customers have all the power. To drive growth in this climate, you must increase customer lifetime value - both by retaining customers longer and expanding spend from each one.
Growing lifetime value is where customer expansion comes in!
What is a customer expansion playbook?
A customer expansion playbook lays out targeted strategies to:
- Drive adoption so customers use more of what they've purchased.
- Upsell and cross-sell to broaden your footprint.
This makes your solution stickier and harder to leave at renewal time.
An effective playbook has three core components:
1. Customer cohorts
You can’t take a one-size-fits-all approach. Segment users into cohorts based on where they are in the journey, what they use and don’t use, usage trends, and buying patterns.
For example, are they increasing or decreasing usage? Have they adopted additional products? Stopped using a product?
Customer sentiment is also telling. Do they proactively engage or stay quiet? Are they promoters or detractors?
Effective targeting requires understanding each cohort’s specific needs.
2. Targeted outreach
With detailed cohort data, you can craft targeted messages and campaigns tailored to each one. Tactics may include emails, in-app messaging, community outreach, and more.
Don't blast the same generic message to all customers. Personalize for each cohort.
3. Targeted assets
Create collateral that speaks directly to what each cohort cares about. For some it's awareness, for others it's education on how to use features, and for others it's the ROI of expanding.
Match assets to motivations for maximum impact.
A sample playbook in action
Here's an example of how we executed a targeted expansion playbook for digital engagement capabilities. We segmented customers into three cohorts:
Cohort 1: Has the license but hasn't enabled the digital engagement app. This consisted of approximately 200-300 accounts.
Cohort 2: Enabled the app but hasn't used it. Slightly smaller cohort of 100-150 accounts.
Cohort 3: Uses a lower license tier but expressed interest in capabilities like SMS. Large cohort of 500+ accounts.
Our outreach used different messaging and assets tailored to each cohort:
- Cohort 1: Drive awareness of what they already have access to. Emphasize capabilities enabled by their license tier.
- Cohort 2: Provide guidance on using the app they installed. Offer training and resources for getting started.
- Cohort 3: Highlight what they're missing out on with the lower tier. Share ROI data and customer success stories.
This approach yielded strong results, with engagement rates of 61%, 52%, and 58% for Cohorts 1, 2, and 3 respectively.
We also gained valuable insights that fed back into the playbook. For example, in-app messaging worked best for Cohort 1, driving the highest click-through rates. But for Cohort 2, email and community outreach performed better.
Analyzing channel performance for each cohort allows continual optimization. The high volume of MQLs validated interest in expanding to new capabilities.
Looking for more examples? We have a whole cohort of playbooks and eBooks at your disposal to get an in depth view of how such a resource is structured:
Eve Chatfield
Follow up is critical
An expansion playbook isn't a one-and-done effort.
Once you generate interest, you must act quickly to convert MQLs, onboard customers to new capabilities, and plan ongoing nurturing.
It's a labor-intensive process requiring tight coordination across the customer success, product, and marketing teams.
Specific follow-up tasks include:
- Immediately engaging MQLs to drive adoption
- Planning nurturing campaigns for "not now, but interested" customers
- Developing training plans to accelerate feature usage
- Checking usage data frequently as leading indicators of adoption
- Managing many complex customer interactions to guide expansion
You also need to keep iterating the playbook based on results and learnings. Improvement is continual!
Success stories showing growth
Here are a few examples of how this approach has helped us grow accounts:
☁️ Cisco
Started with one product, then adopted digital engagement, workforce optimization, automation, and more. Expanded both products used and value.
🏥 Carbon Health
Began with our basic platform, then added phone, automation, and other capabilities as they rapidly expanded. We became their go-to solution.
🚚 JK Moving
Expanded from voice to workforce management, now exploring automation. Increased product breadth and contract value.
💵 Washington Federal Bank
Upgraded to our premium platform, then layered on digital channels. Used cross-sell to increase spend.
The key is landing accounts with one product, then nurturing them to expand usage and spend over time. This drives loyalty, retention, and growth.
Final thoughts
I hope these tips help you start down the path of nurturing customer relationships for growth and loyalty. It’s a journey that never really ends – the work of fine-tuning your approach is ongoing. But it’s worth it.
When you make customers’ lives easier, solve their problems, and deliver value every day, you build bonds that transcend transactions.
Don’t get discouraged if it takes time; lasting loyalty is built slowly, interaction by interaction.
Stay curious about your customers’ needs, keep innovating, and double down on customer success. If you can become their trusted partner, they’ll reward you with their business.
The journey continues, but you've got this. Now get out there and turn your customers into fanatics!
