In the past, understanding which marketing programs delivered the best results proved challenging. Today this really is no longer the case. Marketing departments are swimming in information. But the key to showing ROI through Marketing lies in utilizing the latest tools for example marketing automation and the all of the data available to the modern marketer to make the right decisions that will drive business results.
The goal of marketing is to get and maintain customers. And while much of the time, work and money spent in marketing and advertising involves the process of getting new clients, focusing on keeping the customers a person already have often provides a much higher return from marketing purchases.
Marketing automation tools provide the data as well as the insights marketers need to determine how to increase customer retention, the right way to acquire more of the right kind of clients in the first place, and how to determine an optimal marketing mix to provide on the results executives are expecting.
The importance of customer retention as a marketing goal
Marketing programs are often tied to 3 major objectives: Brand Awareness, Engagement, and Conversion.
But there is a fourth, frequently forgotten objective: Customer Retention . This is despite incredible amounts of research showing that acquiring a new customer will be anywhere from five to twenty five times more expensive than keeping an existing one.
It makes sense when you consider that keeping a paying customer is easier than finding, convincing plus converting new ones.
Research conducted simply by Bain & Company revealed that it costs six in order to seven times more to get a new customer than to maintain existing ones. Increasing client retention rates by 5% increases profits by 25% to 95%. The bottom line: keeping the right customers is important. And it might be the most important way for marketing to prove it is value to the C-suite.
What is retention?
Retention rate is really a metric that measures the particular percentage of customers who use your product over time. Some companies measure the opposite of retention: churn rate. Or the percentage of customers who leave in a given time period.
Most companies look at this with an annual basis, but businesses that sell and invoice monthly (think your cell phone, gym membership, or month-to-month cloud-based software might understand this monthly.
Retention and churn rates have become a popular tool for investors to evaluate the underlying health of a firm. The higher the churn rate (the more clients that chose to leave right after signing up), the more they question the company’s stability.
This is why customer loyalty and retention have become so important in measuring the significance of marketing overall.
Leading companies are using consumer retention as their main marketing and advertising objective to ensure that they are obtaining the right kind of customers to begin with, to predict the come back on marketing overall, and to drive sales and economic forecasting models.
How marketing automation offers the data needed to measure retention
Once a consumer is acquired through all the various marketing touch points, marketing automation can provide the information to determine how much that customer spends, how much they are using your product or service, when they leave, and perhaps why.
For example , using customer data, a lot of companies have discovered that poor customer service is the number one reason why customers leave. Using that will analysis, you can target clients you suspect might terminate and offered them additional services, like training.
Marketing software can determine which content, offers, channels, topics and types of advertising programs are delivering not just new customers, at what cost, but also can determine which usually programs and variables are driving customers who remain longer and spend more.
Acquiring the right clients in the first place
The biggest mistake companies make when analyzing retention rates is just not seeing that a high churn rate is the result of poor consumer acquisition efforts.
Many companies are simply appealing to the wrong kinds of customers in the first place. This can occur when price is big factor in your decision, and marketing programs that will attract deal seekers can lead to customers who leave as soon as they find a better offer.
So as soon as you determine you have a retention issue, consider whether you have a good acquisition problem instead. The aim of marketing is to get and maintain customers who you can provide value to and who are valuable to your business.
How to use marketing software data to drive retention
Marketing automation provides a number of data points to improve marketing ROI and drive customer loyalty and preservation.
- Marketing effectiveness overall: marketing automation enables you to measure the effectiveness of marketing and advertising ROI overall. You can see important performance indicators such as system budget, results, offer functionality, leads generated and deals closed. These call every then be tied back to retention rate and invest levels by various customer segments.
- Marketing mix: marketing automation not only provides overall results, but also can be used to determine the right mix of understanding, engagement, conversion and retention campaign approaches. By using the information from marketing automation, you are able to model the right mix of actions to generate the highest return.
- Sales and customer service insights: marketing automation data may also be invaluable to sales plus customer service teams to determine which usually prospects are the most important to be followed up on, and which usually customers might need some extra assistance or services.
- Content and messaging: Beyond knowing which programs and marketing and advertising mix drives the most value, marketing automation data plus insights can help you determine which usually marketing messages and content resonate with customers who have stay and spend more.
With so much data available today, marketers have the ability to focus their programs plus investments on attracting the perfect kind of customers: customers exactly who get the most value from your options and who return the particular favor in the form or customer retention, loyalty, higher revenue and even referrals.
While customer preservation and loyalty are all many times the forgotten marketing goals marketing automation and the data and insights it provides, are allowing today’s most effective internet marketers to deliver on the promise associated with marketing: getting and keeping the right kind of customers.
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The post Client Retention – The Dropped Art (And Science) Associated with Marketing made an appearance first on Marketing Insider Group .