3 Ways to Increase Lifetime Spend per Customer
As businesses, we all want to ensure we generate as much revenue as possible from each one of our customers. One of the most valuable ways to do this is to increase the amount that each customer spends with us over the lifetime of the relationship.
But as a B2B company, how can you go about achieving that in a way that is both profitable and sustainable? Here’s an overview of two of the most common methods, plus a more unusual approach that you may not have previously thought of.
Cut Prices to Keep Customers Happy
We’ve all been there. Worrying about whether our competitors are about to steal one, or more, of our clients by undercutting our prices.
So it’s almost inevitable that at some point you’ll start to think about lowering your prices, to try and prevent this possible loss of business.
Unfortunately, of course, once you start lowering your prices, it’s very difficult to get them back up to a respectable level in the future.
And there’s never going to be any long term benefit from engaging in a “race to the bottom” with your competitors.
Cut Costs to Increase Profits
Increasing our margins by lowering costs is another way you can get more profit per client. And certainly, there are likely to be several aspects of what you offer that lend themselves to being trimmed somewhat, thus reducing the costs involved.
If you’re considering this as a method of increasing profitability, though, we strongly recommend you jettison the thought and never consider it again!
The best clients for any B2B firm are the ones who are interested in quality, rather than price.
Which is why cutting your costs by reducing quality is a sure fire route to losing good clients, rather than keeping them!
So if the 2 methods outlined above are not recommended, what would we suggest is the best way to increase lifetime revenues from your existing clientele?
Inspire Loyalty to Keep Customers Coming Back for More
We all want to have a contented band of happy customers, who remain loyal to us, and whose heads are never turned by offers from competing firms.
Back in the real world, though, the opportunities for our competitors to pitch for business from our clients is ever-increasing, with new ways to promote a B2B product or service coming along all the time. (eg Behavioural Marketing, Marketing Automation, Programmatic Advertising etc).
So it’s increasingly important that you develop a sense of loyalty amongst your client base. There are several ways of achieving this:
Delivering Over and Above – something we hope you’re already doing, and almost certainly something your competitors will be promising to do as well.
Ongoing Updates – regular email communications about the latest industry news or relevant business-related stories can be something that helps your clients look favourably upon you – if they can find the time to read them, that is.
Building a Good Relationship – remembering specific personal details such as birthdays, favourite football team, names of family members etc. All very useful, but not necessarily enough in itself to keep the relationship solid.
Our personal favourite method for inspiring loyalty, then, is:
A Loyalty Programme – whereby your clients are incentivised to stick around, through rewarding them each time they do business with you.
Loyalty programmes are quite commonplace in the B2C world, of course, with Nectar Cards, Rewards Points, Air Miles etc being a well-known means for companies to keep their customers on side.
In B2B spheres, though, the concept of a loyalty programme is one that you may not have come across. But when you think about it, B2B sales are all built on personal relationships, so the idea of rewarding people is an obvious next step for keeping the relationship active.
Prosper² Rewards® is the UK’s leading B2B loyalty programme, with many companies already using the system to successfully retain their clients on an ongoing basis. And in some cases, clients are even being persuaded to spend more than they were previously, as a result of their participation.
With a range of options for all kinds of rewards incentives – including a Cash Back Mastercard and swappable Prosper² Points – there’s certain to be a way your business can benefit from joining the programe.
Read more about the Prosper² B2B Customer Loyalty Programme