Marketers continually need to adapt their strategies to the most effective tactics based on effectiveness and ROI. It is interesting to note the pivot from the increased cost of social media adverting to traditional advertising such as television, direct mail and radio. Just as customers change, so do marketers.

It’s always been more expensive to acquire a new customer than to retain an existing one. This is all about relevance and value. Best in class retailers have always understood this and built strategies that engage customers over the long term. The key is relevant communication and high perceived value by the customer for the retailer. This often goes beyond simple offers and coupons. For retailers understanding why your customers choose you over the competition is critical, it allows you to “soar with your strengths” to build lasting customer relationships.

Retailers that focus on the “non-digital vs digital” debate are missing the big picture; the focus must be on the shopper and how to best communicate regardless of channel. We don’t live in two worlds (digital and analog) just one. Businesses grow by attracting new customers AND servicing their existing customers not taking their eye off the ball for either.

I guess I thought that “investing in retention” was what every brand did with every nickel they spent every day. Simply delivering on the brand promise — every day. And that promise may evolve, or the methodology of delivering on that promise may evolve, with time and market conditions. But hey, that’s the job. Ask Sears. Ask Target. Ask Blackberry. Ask Apple.

Investing in retention has always been a stalwart of Retail 101. It is cheaper to keep a good customer than to acquire a new one, and increasing RFM (recency, frequency and monetary value) can lead to much improved lifetime value (LTV) for customers. Retail 101 states that 20 percent of your customers typically account for 80 percent of your sales. The 20 percent population of superior customers is not a static grouping because people exit or enter that vaunted population because of good or bad customer moments like a botched return. Savvy retailers understand this phenomenon and reach out to this 20 percent whenever they trigger a potential negative event. Either text, email, mail or a phone call can go a long way for retention. Retailers should also make sure they’re giving customers quick and easy ways to give customer feedback directly, not just via social media. Are customers able to communicate when things go horribly wrong or surprisingly right? The net promoter score (NPS) is not the only way to get a customer’s pulse.… Read more »

We can have our cake and eat it, too! Effective retention strategies can lead to higher acquisition rates. It’s an age-old rule of retail: happy customers become advocates and help acquire new customers through word of mouth. We need to invest in authentic and persistent retention strategies that engage, delight and offer happy customers opportunities to become advocates.

In today’s world where consumers are extremely open to trying new brands and less brand loyal, retention should take priority. I don’t see traditional forms of advertising being the key though – we have learned to tune so much noise out that retention marketing really depends on messaging that reiterates the qualities and differentiating factors of a brand. We know trial is mostly driven by a shoppers own mission-driven searches on Amazon or via search engine, but feeling loyal to a brand is motivated by actually loving the product.

Loyalty is lucrative. Companies with lasting relationships listen, understand and adapt to consumers’ evolving needs.

Investing in relationships for retention helps companies earn shoppers’ satisfaction, trust and sales, maximizing lifetime value per customer.

It doesn’t make sense to spend a ton to acquire customers only to ignore their needs over time.

Happy, loyal customers fuel the top line, so companies need to infuse their strategies with retention-building practices. Subscriptions, private labels and exclusive deals can help.

Before you can retain, you must attract and acquire that customer. The two motions go together, and your strategy should never begin with an either/or proposition. Each company will determine the right mix and emphasis.

Investing in retention is typical and can drive a better ROI than finding new customers can. The key is having the existing customer become more than a regular but a fan of your brand: an advocate of what you stand for, the value you provide, and the service you deliver. I echo Jeff’s sentiment that retention is just an ongoing branding and operational effort. It’s just what is supposed to be done for any well-run marketing team and business. While retention is part of the ongoing marketing organization activity, analysis is needed to improve retention. Fresh data and analytics are needed to understand what is happening now to inform marketing tactics. From my Nielsen days, using panel data, we ran the New-Lost-Retained study for retailers to see what type of consumers were coming in and which were leaving. These groups of customers were typically very different. It is important to understand the demographics of the lost customer, where they went, what categories they purchased so you get a more complete perspective of the lost customers.… Read more »

Market share or wallet share. Hunt or gather. Acquire or retain. The real change for retailers has been that their existing models (regardless of their combination of acquire/retain) has been scrambled. Covid-19, innovation, and CX based competition have put customers at risk with lower switching costs. The consumer is tied down even less with purchasing locally or getting that weekly deal at their local store since they have next day delivery. Hence retention has become more important than before, and customers online and off have begun exploring new avenues. Retailers with an existing customer base need to ensure they will be able to retain it against the onslaught of competition. Loyalty will become a more critical game changer, especially for established retailers.

This question is almost as old as I am and it’s plain said that we’re still having this discussion in 2021. There are increasingly three categories of retailers: leaders, challengers and laggards (aka road kill). The leaders and those challenging the leaders know the value of not only digital acceleration but also the recognition that the best customers are omnichannel (i.e., not just digital) and that even “non-digital” experiences are in fact, hybrid.

The opportunity for marketers in a post-cookie world is to leverage their zero-/first-party data to know their customers, be relevant and pay attention to them, all in order to not only drive retention but to fuel organic growth.

Retailers became too distracted by customer acquisition with the rise of DTC brands that disrupted their product categories. As those DTCs were mostly startups, they focused and optimized for customer acquisition and hoped that the product would “speak for itself” to drive retention. And let’s face it, many of those brands were looking for an exit through acquisition by a larger, legacy brand who would then worry about retention. That said, it’s a fundamental premise that your most loyal 20% of customers (to pick a number) will represent about 80% of sales. Just ask Ulta Beauty about their loyal customers! Investing in retention is an investment in the long-term success of the business. Investing in acquisition is investing in short-term gains to impress investors or acquirers. It’s another well-established retail norm, that retaining customers is cheaper than acquiring new ones. To retain, you’re essentially competing against yourself and if you do it right, you’re continuing to deliver great experiences to those loyal customers, thus continuing to secure their extreme loyalty. Give them a bad experience,… Read more »