Better experiences hold the key to stronger customer retention in 2021
Marketing departments have tended to over-index customer acquisition at the expense of retention in recent years. This is leading to a reappraisal that means, in 2021, looking after customers will become a priority for many marketers as they look to make their businesses more sustainable as an alternative to churning through spend on acquiring new customers.
The keys to stronger customer retention in 2021
Building on this, the need to form more meaningful connections and provide better experiences in order to retain customers emerged as a key prediction for the year ahead in a discussion led by Cameron Clarke, editor of The Drum, featuring Claire Overstall, SVP, global head of customer at The Economist, and Warrick Godfrey, vice president, industry solutions at Braze.
Overstall said: “Customers are more demanding now. More demanding of a good experience, and your brand will suffer if you don’t give that. Managing the customers as they come in, and the experience they have once they’re in, and the dynamic between those two, is really important. Retention can really benefit acquisition because it makes the marketing dollars more efficient. The more people you’re keeping, the better your ROI over time.”
According to Godfrey, marketing departments are delivering on this by forming teams specialising in different lifecycles of customer engagement, such as onboarding or cross-selling. He said: “The new art of marketing is where you’re instilling a culture of testing and experimentation, and if you’re looking at onboarding, for example, you can test and experiment different hypotheses to move the metrics that are important to you and your customers.”
Advancing further into 2021, Overstall predicted that we will see a greater emphasis on cross-functional, collective working between technology, product and marketing teams within companies to better engage with customers. She said that is vital when it comes to achieving the best balance in terms of frequency and tone of communications: “There’s no point in editorial wanting to update customers via a newsletter if marketing is sending something to get you to renew at the same time. We have to be in lockstep… It’s the balance between the amount of data you have on your customer and how personalised you can make things, and how personalised your customer wants you to make something as well.”
Overstall stressed that, while this collaboration across an organisation is important, there should be oversight from a customer-focused team. She said: “My customer team is responsible for triaging what we send out as a company and that we’re not overlapping. So when product wants to send surveys, absolutely, but not on the same day as a renewal notification…. It’s a work in progress, nobody gets it absolutely right, but certainly using one team to centralise communications is helpful.”
The rise in customer engagement through mobile platforms will also continue in 2021, says Godfrey, leading to more sophisticated use of action-based experiences and those relevant to a customer’s environment. This will be important given insight from Braze that shows companies are now using an average of between three and four channels for customer engagement. “Certain channels are very effective but when used at the wrong time create a negative experience,” according to Godfrey.
He argued that technology is an enabler here: “It requires technology to empower relevance in those communications, ensuring that there’s some level of AI and machine learning in place so that the end customer is receiving communications that are going to be useful to them, or improve something about the value set-up.”
Providing this value to customers must be a priority for marketers looking to boost customer retention in 2021, said Overstall: “Big parts of the journey should be automated and getting more data signals to trigger and co-ordinate your marketing journey is important. But, ultimately, the main thing you need to do is to keep making sure that your customer is coming back to you in whichever way suits them.”
Godfrey emphasised the need for a sustainable, long-term, approach when it comes to customers: “A lot of brands forgot to focus on making data operational. Unless your data feeds positive experiences for your customers it becomes a waste of money.”
He added: “2020 taught us we don’t have bottomless pockets to spend through bad business practices. Using vouchers to buy customers might get that customer to come back but unless you make profit on your customers’ lifetime value against your operational expenses and your customer acquisition costs, you essentially don’t have a business that has a right to survive.”
Braze’s own findings show that providing relevant experiences, triggered by technology, boost customer engagement levels by up to nine times. A focus on delivering these experiences, at the right times and in the best places, holds the key to marketers being able to keep customers coming back more often, and for longer.
Watch Cameron Clarke, editor of The Drum, was talking to Claire Overstall, SVP, global head of customer at The Economist, and Warrick Godfrey, vice president, industry solutions at Braze here.
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