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Dialogue, relationship building help Aladdin Knowledge Systems increase customer retention

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Customer relationships aren’t easy, especially in the b-to-b world. Businesses frequently have many levels of decision-makers—all with different priorities—not to mention high turnover among personnel. Those considerations, combined with a proclivity for one-way communication on the part of many companies, can make long-term loyalty as well as give-and-take between vendor and client difficult to come by.

At least that was the experience of Aladdin Knowledge Systems, a provider of security services and solutions for digital content. When the company decided to improve customer retention last year, it realized many of its customer relationships were tenuous.

“Although our salespeople had relationships with our customers, we felt the company didn’t,” said John Gunn, the company’s VP-global marketing.

This was a precarious situation. As the market leader in protecting independent software vendors from piracy and IT theft, Aladdin was seeing competitors targeting its customers. Securing new ones meant long sales cycles and costs in excess of $500 to generate each qualified lead.

Aladdin found an opportunity to overcome these challenges by moving away from its “monologue” marketing approach. Instead, the company set out to establish a dialogue by listening, learning and communicating with customers in personally relevant ways.

Working with consultant Frost & Sullivan, Aladdin began to open up the lines of communication with a global online survey last November. The survey solicited feedback on various topics, from brand perceptions to satisfaction with technical service and marketing preferences. Customers, prospects, channel partners, lost customers and other industry stakeholders were invited to participate.

Aladdin followed up negative responses with personal contact. “We mobilized this internal army of people that did extensive [post-survey] communications,” Gunn said. “If somebody gave us bad marks, a lot of them were surprised to have a follow-up call. It was a great chance for us to make them happy again and to … fix whatever was broken.”

Aladdin also invited VIP customers to take part in regional advisory board meetings. During these daylong events, customers discussed in detail Aladdin’s products, services and strategies, and commented on how these met their needs.

An independent moderator kept the conversation on point.

This face-to-face interaction worked so well that Aladdin incorporated it into its event marketing. It previously had used road shows to introduce prospects to the company and products. Aladdin began inviting existing customers to attend and learn about new-product features and future plans. According to Gunn, great things happened as a result.

“Our existing customers started evangelizing our products, and emerged as incredibly credible and effective sales agents to our prospects,” he said. “We also witnessed this wonderful interaction [among] customers with each other and with our technical and product marketing people. We knew we had a winning formula that had to be expanded.”

Using direct marketing as a means of dialogue was also a priority. In response to Frost & Sullivan’s survey results, Aladdin increased the frequency of its e-mail communications to customers and channel partners, paying close attention to opt-out rates to avoid over-communication. It made sure all marketing pieces had response mechanisms.

And Aladdin upgraded its CRM system, which enabled it to begin segmenting its contacts within customer organizations. Having created personas for different people within the buying cycle, the company now better understands how individuals influence purchasing decisions and can communicate its brands’ value based on decision-makers’ distinct interests.

“We need to talk to people as we would to a friend,” Gunn said. “The influence this has had on our direct marketing pieces is to not always just go for the close … but to demonstrate where we add value to relationships.”

As a result of these efforts Aladdin has increased in customer retention by more than 10% in some regions. It has also seen a rise in referrals.

“In the past we provided an incentive for our customers to refer, but it didn’t get a huge response,” Gunn said. “As we got closer to customers … we found that those we have a relationship with are very willing to recommend our products if we just ask.”

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