How to Steer Past Three Retention Roadblocks

Despite the evidence stressing the importance – and payoffs — of a concerted effort to retain customers, many organizations continue to spend a lopsided amount of time and resources on customer acquisition. In the process, they are overlooking rich pockets of revenue and predictably strong ROI from evolving customer relationships.

Why? Here are three common retention roadblocks you need to steer past:

Short Term Thinking, Long Term Problem

Some marketers hang their reportable success on the percentage of new customer activity, no matter how small that percentage, to prove that marketing is working. Acquisition can be relatively easy when it comes to buying lists and blasting, but without sophisticated modeling, it is difficult to say who will convert.

Retention is much harder. It requires deeper thinking about customers, understanding them well enough to offer tailored experiences based on their needs and interests. It requires effort to be relevant on their terms, whatever they may be.

If a current customer is not marketable via email, the smart move may be to serve them up a digital ad of a recommended product. The ad needs to be specific to their buying motivations, whether they bought last week or last year. Showing a generic (or even worse, product they already purchased) will earn your brand the eye-roll of a customer who can see that you don’t know, or particularly care, who they are.

Make no mistake: today’s empowered consumer won’t bother with too many of those eye-rolls before looking away for good. So, yes, it costs a bit more to be smarter about your customers, but it can cost much more to blindly fire away.

Discount Fever

One of the problems with over-focusing on customer acquisition is that when response drops off, retail marketers often reach for the discount. Maybe it’s to bolster sales or maybe it’s just a quick fix to try to keep a fading prospect. But again, this is a blind move – one that can cost them unnecessarily. That’s why more brands are shaping strategies to keep customers without filing them away as discount buyers just yet.

A couple of our clients are trying to wean customers from being discount-heavy buyers. In 2018, customers were grouped by their discount buying behavior.  Now, they are putting customers into two messaging categories: those who shop full price and those who shop at outlets/warehouses

There will always be people who want to buy full price, and some who are going to buy discount, because that’s what they can afford. There will always be one customer that spends $15 every month and another customer that spends $500 once per year. Both types of customers are important to the brand, but they need to be targeted differently.

As we’ve learned from control groups, discounting unnecessarily can also upset customers: “She got the discount, but I didn’t.” It’s a turnoff. The smarter move is knowing what behavior pulled the customer in while keeping the next marketing initiative likely-to-interest them.

All marketers want their brand on a pedestal, but 80% discounting is steering them somewhere else. It’s all about perception, and consumer perception has never been more powerful – or potentially destructive.

The #1 problem with discounting is that there’s no strategy in place other than “get them to buy!” After that, there typically isn’t much in place to evolve them into a full customer – like lessening the discount while mixing in items that can attract them to buy full-price.

Educate, Don’t Sell

Done right, retention campaign content is more about education than offer. Just by educating customers around different categories, marketers keep them attuned to the brand and guide conversion.

Repeat buyer engagement, targeting customers who just bought, is a good example. You can thank them for recent purchase, and offer products that complement their recent purchase, like a wallet or phone case to match that new purse.

The goal is to keep them engaged, nurturing their relationship with the brand as a whole vs. a quick, limited, hit. This strategy focuses on being relevant to the customer according to their behavior. No offers, no discounting, just straight education.

Events-based organizations can inform, too. They can educate the customer about event info – not only the day of, but how to prep, or where to stay. It’s not about the event or product, but the experience leading up to it. Customers see that the organization has thought about it on their terms, and that when they signed up, they entered a relationship with a partner that cares.

Making it a little more conversational – here’s what it does, what are you looking for? – opens up all kinds of possibilities. If you know why they are buying your products, you can shift or shape the offer. Brands can become more versatile by creating more engagement across customer segments.

Denise DeSisto is VP, marketing automation & product innovation at Boston-based Customer Portfolios,

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