#LSA19: The Key to Earning Customer Trust is Securing Vendor Trust
February 26, 2019 | Contributed by: Rozanne Bonavito
Less than 1 in 5 channel partners reach “trusted partner status” from their vendors, we learned in today’s lively session at LSA19: The Science Behind Increasing Customer Retention, with Uberall’s Lex ten Veen, EVP of Partnerships along with Vendasta CEO and Co-founder Brendan King, and Neil Crist, VP Products at Moz.
Which is too bad, according to the session speakers. Because being a trusted partner and getting access to SME training, expertise and support will not only help you to win more clients—it will also help you keep them.
This might beg the question of why many clients don’t bother? But that problem is more often on the vendor side, says Uberall’s Lex ten Veen. Channel-enablement technology and support is not even available at 54% of SaaS companies in this space, and only 35% of the companies who do have it offer effective coaching and development support for channel salespeople.
As for the agencies and resellers who could be trusted partners but aren’t? It turns out their loss is your gain. (And this is where the retention part really starts to come in.)
“Customer churn is a chronic problem for companies selling media, software and services to SMBs,” explains Lex ten Veen. “And right now, it’s a bigger problem than ever.”
This matters because acquiring a customer is a lot more expensive than keeping one. According to Gartner: a 5% increase in retention can increase your profits by 25% – 125%. And according to Harvard Business Review: acquiring a new customer can be 5x – 25x more expensive than retaining an existing one.
Trusted partner models are a key way to stop customer retreat, agreed the panel, speaking from opposite sides of the vendor/partner relationship. Four elements that have made the difference for the panel are dedicated sales support, marketing support, product knowledge and technical expertise.
Strong sales enablement from vendors, according to Lex ten Veen, can offer benefits like:
- 28% shorter sales cycles
- 13% more sales reps achieving quota
- 12% higher lead conversion rates
- 10% better attainment of team quota
- 8% higher acceptance rate of marketing leads
Successful strategies that the panel outlined for keeping customers happy included:
- Onboarding, Expectations, and Milestones
- Trusted Partner Status
- Upselling and Cross-selling
- Daily Practices and Measurement
Vendasta’s Brendan King offered some specific suggestions for companies looking to keep SMB customers happy and onboard, shared from their recent survey of SMBs and channel partners.
Advice included engaging with clients at least weekly, but preferably on a daily basis. Vendasta noted a 151% increase in retention rates over three years when SMBs are engaged. One way to increase engagement, he suggests, is sharing data with actionable insights and tools. Another is offering “do it for me” marketing (DIFM) services such as social media posting, website building, review response, managed advertising, online listings management, SEO keywords and content/blog postings.
Neil Crist, from Moz, had already laid out some of the most winning local strategies that can help you help your SMB clients be successful and win their trust, fresh from Moz’s brand new 2019 State of Local SEO Report. These included: versatility, education, a more holistic approach to campaigns, experimentation, and an emphasis on organic traffic—which still drives 20x more clicks than paid, according to Neil Crist.
Circling back on the partner theme, King also strongly advocated for bundling more products and services into your offering. The more products and services your SMB clients are successfully leveraging from your portfolio, the more value they see in their partnership with you.
Executing on these strategies is exponentially easier with the support of a vendor through a trusted partner program, they explained, because once that status is attained, vendors can often help shoulder the burden of the other retention plays, directly supporting your team and even your end customers.
The big takeaway? If you’re looking to reduce your churn, make sure you’re working with vendors who not only have a terrific product, but who have a strong “trusted partner” program to support it.