Why Selling Authentically is Your Best Bet for Customer Retention
There’s no better way to ensure a customer bails on your solution than to make promises you can’t keep. And while it’s only natural to want to say a solution is better, stronger, smarter, and faster than the other guy’s, statements like that (if they’re not true) are likely to attract bad fit customers who then churn pretty quickly.
In sales, it’s always going to be tempting to do and say whatever it takes to get the deal in the door. Sales leaders in particular need to set the tone, guardrails, and lead by example.
When it comes to marketing and sales, honestly truly is the most profitable policy. Here are the reasons keeping it real also means keeping your customers.
AN HONEST FIRST IMPRESSION ATTRACTS THE RIGHT CUSTOMER
One of the easiest ways to lose a customer is to present your product as better than it really is. That’s not to say your messaging should present your product in a bad light, but honesty is key. Don’t say your solutions are fast if they aren’t fast; don’t say they’re simple if they’re complicated.
Marketing and selling inauthentically actually increases churn, decreases up-sells and ultimately damages capital efficiency, even in the earliest stages of the buyer journey. From the first time a potential customer Googles your company or clicks on your banner ad, they’re forming an opinion, and that initial opinion affects how they see you in the long run. Humans naturally place a lot of weight on these first impressions, and can easily feel let down if those impressions prove false. How a solution is messaged, first in marketing, then in sales, impacts who is in the pipeline and what their expectations are.
YOU CAN’T UPSELL BAD-FIT CUSTOMERS
When you master your first impressions and set expectations accurately and authentically, buying is genuine and needs based. These buyers are the ‘right’ customers.They may be harder to find. They may take longer to close. They may cost more to acquire. But, in the long run—even at first renewal—they will pay off.
Studies show that the average SaaS business generates as much as 16% of its new annual contract revenue from upselling existing customers. And customers who have realistic expectations of your company are easier to upsell, easier to renew, and less costly to service. Good fits are good for metrics, good for the P&L and good for your valuation.
SOMETIMES ‘NO’ IS THE BEST WORD YOU CAN SAY
Forging relationships that are right for both your company and customer takes surgical precision: pinpointing exactly the right customer for your product and turning away bad-fit buyers. Saying ‘no’ to willing buyers is hard. For salespeople compensated based on contract value, it’s REALLY hard. Even for marketing, which is often assessed based on lead generation and velocity, it can be hard to willingly weed out the chaff. Surgical marketing takes a steady hand with a constant eye for future value versus present value to maintain a quality over quantity focus.
YOUR SALES INCENTIVES COULD BE THE KEY TO AUTHENTICITY
Maybe you’re offering your team Glengarry Glen Ross-style sales incentives. On the surface, it seems to be working: sales are up, and everyone’s happy. Then customers start to churn and it turns out those bad-fit sales are actually hurting instead of helping.
Organizational design often intentionally or unintentionally sets incentives. For example, if the sales team is responsible and compensated based solely on initial contract value (ICV), it may be more difficult for them to say ‘no’ to ill-fitting customers. If they are compensated on ICV as well as renewals, perhaps their initial focus is more aligned with longevity and lifetime value (LTV). What no one in the C-suite wants is an organization that’s great at lowering CAC, but lousy at preserving lifetime value. That’s what high performing acquisition combined with high churn looks like and it’s VERY expensive.
Building relationships with customers who become brand champions starts with authenticity. Contracts, upsells, and renewals can all be directly tied to portraying your solution accurately. Yes, your marketing and sales will (and should) frame your product in the best light possible, but focusing on promises you can keep is the best way to paint your solution in a flattering light.
From your first search ad to your nurture emails, white papers, webinars, sales calls, follow-up emails, proposals and onboarding materials—tell your story authentically. If your product can’t handle the truth, you have bigger problems. But, if it can—if it really is a great solution to a real problem—then frame it accurately. When you do that, you’ll attract the right customers, who will buy more from you and remain customers for a very long time.
