In recent times, retention marketing is gaining increasing mention and traction among marketers. Also termed lifecycle or loyalty marketing, it refers to the strategy of ensuring customers are engaged, satisfied and spending happily.
This new form of marketing seeks to ensure engaged existing customers who keep returning to a store to shop. Or to bring back past customers once more into the buying cycle. Here, the aim is to keep offering customers relevant and engaging content that increases the customer lifetime value (CLV). In turn, this boosts the overall revenues of a business.
The retention strategy is a shift from focusing solely on acquiring more customers to that driving more profitability from the customers already on the roster. Specifically, invasive marketing denotes a mode of marketing where companies market products without receiving consent from recipients or the target audience.
Analysts say attracting new customers costs seven times more than retaining existing ones. Besides, research indicates that a modest 5% rise in customer retention helps in generating profits of up to 125%. This single factor highlights why marketers are attaching great importance to retention.
On the other hand, focusing only on acquiring new customers while ignoring retention metrics results in greater customer attrition. Ultimately, this ends in a loss of revenue and lower profit margins. Small wonder then that smart enterprises are according more importance to retention rather than invasive marketing.
According to Experts,to drive successful retention marketing, an organization needs to establish a two-way, engaging relationship with customers. Given the present scenario of big data and predictive analytics that offers companies in-depth consumer insights, personalization is crucial for engagement. Indeed, customers expect and demand personalization.
Through constant communication with clients, companies can foster an ambience of transparency with these stakeholders, thereby winning their trust. Based on the edifice of trust, it is possible to build stronger and longer-lasting relationships with customers and other stakeholders.
When customers remain loyal to a company, it is imperative to reward them with extra attention and care. This can be done via extra services, deals and discounts and suchlike. Moreover, making them feel part of one’s business boosts the loyalty quotient. Consequently, such customers won’t just return for repeat purchases that generate greater sales, they can also become brand ambassadors of sorts.
Conversely, invasive marketing typically tailors promotions targeted towards the needs or wants of potential customers. Often, the users or viewers have the choice of turning this off but only after they have viewed the information that the company wished to communicate.
Some years ago, invasive advertising denoted static one-dimensional hoardings on the roadside, incompatible product commercials in theatres and on TV or some junk mail. Fortunately, big data, smartphones and smart advertisers have transformed this into more personal communiqués.
This is good for marketers because invasive advertising has significant downsides. For instance, if customers are overstimulated or saturated with product messaging, it’s a question of time before all this turns into white noise.
This is precisely the fate that befell direct mail, now derided worldwide as ‘junk mail’. The same fate is playing out with social media. As things now stand, invasive marketing could also fall victim to this phenomenon of junk and noise.
Meanwhile, it can be extremely tempting to deploy the latest technologies to place one’s business, products and/or services before customers. But merely managing this isn’t enough. To succeed, both the messaging and the mode must be appropriate. If this isn’t done, it will only generate more spam for customers to ignore and junk.
That personalization augments the value of marketing campaigns is only beginning to garner evidence today. But this is immediately apparent at a micro-level. Consider the email inbox or social feeds. People are more prone to paying attention to relevant updates while invasive messages or irrelevant pop-ups will attract their ire.
This factor must be borne in mind at all times when building marketing campaigns. No doubt the tech capabilities exist to target specific cohorts and personalize marketing messages to them based on the array of data analytics and information available. Yet, the creative urge to do so must tread a fine line between relevance and invasiveness.
Of course, retention campaigns cannot completely replace acquisition marketing that is still necessary to acquire new customers. Stakeholders should not forget that naira and kobo are both essential to maintain harmony and balance in business. Nevertheless, the two marketing elements must be used in consonance for more productive outcomes while ensuring invasive marketing respects the sensitivities of customers.
