Note – Although this post is about B2B businesses there are many B2C’s with the same challenge.
In the B2B world there are two broad categories of products; software and hardware (usually including software); services are special and they are usually ongoing so there is no question of the customer is still active. The “pure” software providers solved the “Is my customer still is my customer” problem in one of two ways:
- Enterprise, or critical application software, users typically sign-up for a post warranty maintenance and support agreement. This covers not only technical support, i.e., help, but also the periodic upgrades that fix bugs and add features. It also ensures that the supplier and customer stay in close contact and constantly enhance their relationship.
- They offer their products using the SaaS (Software as a Service) business model. In this model the user does not purchase or host the software, the developer retains ownership and typically hosts and maintains the software and client data. The end user does not have to worry about backing-up his data, upgrading the software or even running a server. The user only has to have an Internet connection to access both the application and data. The provider handles all the hassles and charges a monthly or annual fee based upon the number of users, amount of storage or any other value added set of offerings that work for both parties.
The situation is very different for “hardware” companies. Many hardware product end users do not purchase a support agreement for one or more of these reasons:
- They have skilled maintenance staff on-site and a ready supply of spare parts
- Up-time is not critical and priority response, usually a feature of a maintenance contract, is not worth paying for
- The equipment is very reliable and does not require maintenance
- They use a third party service organization in a desire to save money
- They dropped their agreement when the equipment’s usage declined and it became a back-up unit.
In all these cases, the product is being used and, by most definitions, the owner is still a customer.
Remember that a major part of a growth and retention strategy is to not only sell more of what the customer originally purchased but to sell them other products and services that will add value to their business. So, if a company is serious about retaining it’s customers it must have a non-intrusive way of periodically checking-in with the infrequently communicating segment of their customer base to make sure things are still going well, the equipment owner is still likely to contact you when they decide to replace their equipment and they know about any trade-in or rebuilding possibilities you offer to keep your customers and maintain their loyalty. It doesn’t matter if Sales or Service does this periodic checking. What matters is that it is being done consistently, by one of the groups, and that they are sharing what they learn with their partner in the other group.
Another way to solve this dilemma and add-value to your customer is to periodically communicate via a newsletter or technical bulletin. If the content is valuable then the customer will appreciate receiving the information. However, if the customer is no longer using your products they will certainly opt-out of receiving the “spam” and you will find out what is going on by asking a brief question when the opt-out request is received.
As I said in the opening, this also happens in the B2C space. For example, I have a 2000 Acura, which I really still enjoy driving. I had it serviced at the dealership until I hit 100,000 miles. At that point, I starting having the service performed by my neighborhood repair shop. I still drive and enjoy the car and when I am ready for a new car, I will definitely consider Acura again so I am still a customer (even though my dealer stopped communicating with me.)
Customer retention is the key to long-term growth. I’d like to hear how you handle this process in your company.