A friend is easier lost than found. And so is a customer.
Keeping friends and retaining customers takes hard work. But it’s worth putting in the work to get the payoff: close relationships and consistent business.
Customer marketing is based on the idea that marketing can’t slow down after the acquisition. You won them over, so now it’s time to deliver. The brand experience you deliver is more than what you offer. It’s also how you communicate. Do you still make them feel special, or do you take them for granted? Do you open up more, or do you become distant?
Whatever you were doing, keep it up—even ramp it up. Your bottom line will thank you, and here’s why.
Many companies have entire teams dedicated to retention, working against churn and building long-term loyalty. Why the obsession? Keeping your current customers is much more cost effective than getting new ones. Depending on your industry and business model, acquiring new customers can be five to 25 times more expensive than retaining your current customers.
One of the most commonly-cited (and mind-blowing) retention statistics comes from Bain & Company research: When customer retention rates increase by five percent, profits increase between 25 and 95 percent. This connection alone should inspire you to invest in retention marketing—whether your customers are consumers or businesses. And yet many companies continue to put acquisition marketing first. In a May 2018 ProsperWorks survey of over 1,000 business professionals, participants shared that their first business priority is “expanding their customer bases.”
This isn’t to say you should abandon your top-of-funnel efforts to home in on retention. The balance of the two won’t be the same for everyone, and it may change over time as your organization evolves. It’s all about setting priorities, goals, and benchmarks that make sense for your business model and customer value. You also need internal alignment on these priorities to create a seamless brand experience from start to finish.
Often, organizations try to solve customer retention problems by over-indexing on either operations or marketing—or use one to solve the other’s problems. You can’t use marketing to solve a product problem, and vice versa. They need to work together in their respective realms of the brand experience to make your customers stick around.
If your customers aren’t happy with your product, trying to convince them otherwise or to appease them through marketing messaging and tactics won’t work. You can’t fix a messaging gap or turn around your brand image by a launching a shiny new product or giving out a big discount. Something new or different may distract your customers for a bit, but the effect won’t last.
It’s definitely harder to fix than add, but it’s key for retention. An MIT Sloan Management Review study found that adding more can actually have a negative effect on customer satisfaction. Surprisingly, the study participants who used a digital video player that had 21 features were less satisfied than those who used a model with only seven features. In theory, more features lets you do more. But in reality, the user experience of “more” isn’t always better.
Image attribution: Artificial Photography
After the conversion, the customer hand-off isn’t always smooth in terms of teams, tools, or messaging. This makes for an inconsistent transition at best and causes early customer churn at worst. Many marketers believe in the importance of retention, but don’t understand what it takes. The ProsperWorks survey results show that the second priority of business professionals is “delivering a better relationship experience.” However, they still perceive the customer relationship as an acquisition play: Only 13 percent think relationship building is key to retention.
I’ve experienced the downfalls of this disconnect between acquisition and retention—and the glories when they’re integrated—in my own career. When I started working at Uber, driver retention marketing in the US was largely decentralized and managed locally by city teams, while the majority of driver acquisition efforts were controlled centrally at headquarters. This fractured and siloed framework resulted in misaligned and excessive messaging, creating a scattered brand experience for drivers. When new marketing leadership brought widespread centralization, the consistency and quality of both acquisition and retention marketing improved drastically.
To avoid fragmented marketing, use these baseline principles to integrate your customer marketing.
Unify all marketing teams and disciplines around the same overarching goals and success metrics. Naturally, each discipline’s goals and metrics will branch out and vary from there, but these common priorities will help bring your marketing teams together. Internal friction and bad customer experiences happen when teams have competing goals—and the disconnect will surface in your marketing.
Create a single map of the customer journey that incorporates all customer touch points and channels. Conflicting messaging happens when there’s no common interpretation of the customer journey.
Ensure that your internal or third-party tools complement each other’s technology and purpose and can integrate if needed. You don’t want to lose any customer data or interactions as they pass from one system to another, and you certainly don’t want to waste money on tools that just create more inefficiency.
Encourage strong relationships among your organization’s marketing leads to keep their respective teams aligned, and also with your product leads. Salesforce research shows that top marketers are 3.7 times more likely to be very satisfied with their collaboration with other departments, so positive relationships go a long way.
Have a centralized brand guide that all teams use as they write copy, design creative, etc. Train all internal or freelance creatives on your brand voice, tone, and personality for consistent messaging in all your marketing. You don’t want to sound like a different brand depending on who’s behind the creative.
So don’t limit your concept of marketing to awareness and acquisition. Internal alignment can be challenging with necessary team divisions and multiple business lines. Breaking down silos and shifting internal mindsets won’t happen overnight, but persist in pushing this retention agenda. And use the data to back you up. After all, retention is where the money’s at.
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Featured image attribution: Raw Pixel