Higher Logic Blog

How to Use Activity Data in Your Customer Community to Increase Revenue Per Customer

Written by Julie Dietz | April 20, 2016 at 12:30 PM

It's one of the most well-known rules of doing business: it's much more expensive to acquire new customers than to retain the ones you already have.

While exactly how much more expensive is up for debate, you can estimate that new customers cost five times more than existing customers. Since selling to existing customers is cheaper (lower cost of acquisition), those sales result in higher margins. That line of thinking leads to this basic principle: one of the simplest ways to increase revenue per customer is to sell to the customers you already have.

The problem, however, is that even though your existing customer base already has a relationship with your company, they still need to receive value from you before they make an additional purchase. You can't assume that just because they bought from you once that they will do it again. To encourage repeat purchases, you need to nurture customers.

Effective nurturing requires you to understand what educational content and end products customers need to solve their problems - and your online customer portal or community provides the perfect platform for gathering this information. By tracking and analyzing customers' interactions with their peers as well as the content they consume, you can identify sales opportunities that could increase revenue per customer.

Let's dive into five essential questions you should always ask - and answer - using customer activity data before selling to your current customers.

5 Pre-Sale Questions to Answer with Online Activity Data

Question #1) Does a Customer Have a Problem That You Can Solve?

Your current customers are valuable to your company in terms of retention and revenue, so you don't want to push additional sales too hard, too soon, and risk alienation. If you're too cautious, however, you could miss out on an opportunity to solve a problem for your customer.

The happy medium between pushing and missing opportunities can be found by identifying which customers are discussing problems in your online community. Track customer behavior in discussion forums and pay attention to the types of answers they're seeking. This activity data will highlights the challenges your customers have and how they are changing.

For instance, if a customer posts a question in a discussion forum about a problem, such as technology synching issues, see if you have any updates, services, or product-add-ons that could remedy the situation. If you do, that's your cue to reach out with additional information.

Question #2) Which Customers Are Likely to Purchase an Upsell, Services, or Add-On Product?

As customers join your customer community and begin to engage, you can track the behavior of members who often purchase additional services. Once you've identified those customers, use their information and habits to build a profile representing their customer journey, complete with buying signals.

By overlaying that profile onto new customers, you can determine how likely that group is to make repeat purchases based on their behavior in your online community.

For example, if you discover that customers often ask questions about product prices in discussion forums before they make an additional purchase, you can set up keyword alerts to help you identify those customers. Once you know who they are, you can further nurture them toward an upsell or add-on.

Question #3) When is a Customer Ready to Learn About an Upsell or Cross-Sell Opportunity? 

Upselling and cross-selling may have a bad reputation, but that's because most companies try to upsell when customers aren't ready to make a purchase. To avoid this pitfall, use your activity data to ensure your timing is right.

Review the customer behavior data from your online community to find conversations about new products, problems, and prices to gauge where your customers are at in the buying process. Are they satisfied with their current product? If they are, they need more nurturing before they become a sales opportunity. Is your customer researching new solutions to problems? They may be ready for a sales conversation.

When your customer needs a new product, tailor your upsell pitch to your customer's needs, such as introducing them to a product that will solve their most important problem.

Question #4) Which Product Should You Suggest For Each Customer?

All of your products won't be right for every customer. Rather than attempting to blindly sell a single product to your entire existing customer base - a process that will likely damage the relationships you've already built - you can determine which of your customers would benefit from each of your solutions.

Your online community's activity data can highlight the best offer based on gaps between customers' problems and their current solutions. If you notice a customer has been posting in a discussion forum about how they wish they could do x, y, or z, then match that to your solution set. If you have an another product, service, or add-on that can solve their problem, you have identified the best product to suggest for that customer.

Question #5) Who, at Your Customer's Organization, Should You Contact About Additional Products or Services?
Chances are there are multiple people at your customer's organization that use your products or services. Some, all, or even none of these people may be responsible for future purchases and product decisions, which means that for a successful upsell or cross-sell you need to identify who has the authority to make purchases.

You can use activity data in your customer community or customer portal to separate the end user from people with buying authority. Those with buying authority are your best sales opportunities, and you can reach out to them when the organization would benefit most from expanding their products or services.

To identify people with buying authority, look for more in-depth and organization-related comments and questions in your customer community. Instead of a question about how to use a specific tool, someone with buying authority may ask about ROI or what differentiates your product from others on the market, for example.

Using Activity Data to Increase Revenue Takeaway

Even after customers have made a purchase, they still expect relevant communication and a deep understanding of their needs. In fact, once they're your customer, they expect you to know them even better than before.

Your online community makes learning about your customers easier. As your customers engage with content and have conversations in your online community, they generate activity data that you can use to determine future sales opportunities. Use that valuable insight to guide your sales team and your customers to their next purchase.