With as much emphasis as companies put on the customer lifecycle, it can be a complex and convoluted process. This is because companies are confused about which department is responsible for which stage of the journey and how to effectively make the most of each phase. With clearly defined responsibilities, companies can establish strong strategies for each stage of the customer journey.
Despite an industry focus on the five stages—awareness, consideration, purchase, retention and advocacy—many of them fall to the wayside. It seems as though marketers and companies in general direct all their efforts toward awareness and advocacy.
A recent survey revealed that only 19% of professionals are marketing to all stages of the lifecycle. Many cite budget as the main reason they haven’t expanded their efforts beyond the first stage, with 60% of the marketing budget dedicated to gaining new customers. In contrast, only 30% of the budget is dedicated to retention.
Retention is the phase that suffers from this lack of funds and, as a result, a lack of attention. Many companies debate who the true owner of retention should be. The survey showed that 29% believe it is customer support’s role, 26% said marketing and 26% said sales. Regardless of who is the undisputed accountable party, if marketing simply takes ownership, there is a greater chance customers will stick around longer and for more valuable reasons.
Retention marketing is not a tactic many explore because so many marketers are fixated on the introduction of the customer experience. However, it pays to be a company focused on retention marketing. As a cost-effective way to keep your customers, retention marketing shouldn’t be left behind.
Create Experiences for Improved Retention Marketing
It’s a widely accepted truth within marketing that it is far less expensive to retain a customer than acquire a new one. But that all depends on how you are acquiring your customers and how you market to retain them. If the investment is primarily in reaching new groups of customers, there is going to be a subsequent investment in learning everything you can about this new group.
Learning from the customers you already have provides the insight about your current audience: what they want and need from your company and its marketing. In this way, you can target them specifically to keep them as customers and eventually steer them toward the advocacy stage.
The key to retention marketing in a ubiquitous content marketing landscape is to weave experience through everything you offer your customers. They don’t just want to read a blog post; they want to take a quiz. They don’t just want to learn more from a whitepaper; they want to discuss it with someone who can tell them more.
Spotify, the music streaming app, is a prime example of conversion and retention marketing. With a conversion rate of 27% from free to premium customers, the company is doing something right. The company touts that music isn’t just about listening to melodic sounds; it’s engrained in the human experience. Spotify customizes recommendations, presents emotionally-inspired playlists and personalizes every aspect of the user interface.
While the company also has a high number of free users, they want to keep customers and encourage them to upgrade. The both subtle and apparent calls-to-action, specifically curated playlists and obvious perks of a Spotify experience keep customers around.
Companies should rethink each piece of the content journey to become more than just text on a page and to truly immerse the customer as Spotify transformed the music listening experience.
Beyond Confusion Toward a Team Effort
Marketing should specialize in creating experiences for existing and new customers. It’s one of the most attractive features a company can offer to gain conversions. So it should be no problem for marketing to claim the retention phase as their own. For truly successful retention, marketing can lead the way, but also integrate teamwork from customer support and sales into their retention approach.
With input from each group, a company can fully understand its customers and how to develop the experiences to use in retention marketing. Together, these groups can ensure customers are happy, discover what they desire most and move toward further innovation in both the company’s products and services, and its marketing.