The customer loyalty landscape has changed.
Pre-pandemic loyalty programs were heavy on discounts; back in 2017, 64% of UK consumers indicated value for money as the biggest driver.
Today, customers are looking for convenience, value, and empathy. They’re not looking to be bombarded with discounts or deals, according to MasterCard’s research.
In our experience as CXM consultants, the best customer retention programs are designed to:
Since the COVID-19 pandemic started, more than 75% of customers have changed their buying habits. Holding on to customers long-term remains a pre-eminent challenge for marketers.
Customer lifetime value, or CLV, is a hotly contested marketing metric. Some marketers swear by CLV as a success measure, while others place greater emphasis on revenue.
CLV is important. Whether it’s the most important measure depends on your business goals, but long-term loyalty is always valuable.
An oft-quoted statistic from Bain & Company is that a 5% increase in customer retention yields a 25% profit increase. McKinsey’s research had similar results, finding that the top-performing loyalty programs can boost revenue by 15-25% among customers who redeem points.
But customer retention isn’t confined to loyalty programs.
Although loyalty programs are effective, other avenues exist to increase retention rates, deepen customer relationships, and deliver against growth goals.
It might seem counterintuitive to lower prices to boost revenue. However, McKinsey’s research found that’s exactly what happens.
Lowering the price of redemptions in loyalty activity can boost sales by reigniting interest in dormant customers. In other words, incentivising loyalty with discounts works.
There are caveats, of course.
What McKinsey calls “redemption elasticity” seems to work for small price reductions, so there’s no need to offer Black Friday-scale deals.
You also need to know:
There’s a wealth of data involved in crafting your offer message. Keep reading to learn how Marketo Engage can deliver the insights you need to make those decisions.
Customers are experiencing pandemic fatigue. Try to lighten their burden by providing personalised, value-adding customer experiences.
They don’t necessarily need to be purchase-orientated experiences. Instead of rewarding repeated purchases, try to find the experience that will add value to the interaction.
You can use Marketo Engage to:
Perhaps your customers would prefer free shipping over a bonus gift. Maybe they are still under contract with another vendor, but want to stay connected until the time comes to change.
Customer journeys are non-linear and largely unpredictable. To boost retention rates, you need to anticipate your audience segments and simplify the interaction experience.
You don’t need to go all-in with an all-out retention strategy. It’ll catch your audience off-guard and create a kind of customer experience whiplash that ultimately backfires.
Plus, it’s expensive.
Marketo’s AI-powered analytics provides rich behavioural data that you can use to identify opportunities among targeted segments, and tailor the customer experience accordingly.
Customer retention is a team effort.
Aligning marketing messaging to sales initiatives improves engagement, leading to higher conversion rates and greater loyalty. The experience from the customer’s perspective is consistent, coherent, and continuous.
The platform is designed to bridge the divide and break down data siloes, creating a bi-directional data link between CRMs and marketing activity.
Ingrained intelligence helps you identify high-potential accounts based on best fit, intention, prior engagement, and granular interaction data. From there, Adobe’s Sensei AI powers personalised cross-channel customer experiences – what they call the “white glove experience”.
Martech is a crucial enabler, not a replacement for marketing expertise.
So much of the customer retention challenge resides in feelings.
Use the wealth of marketing data at your disposal to craft personalised journeys with empathetic messaging. You can time your interactions perfectly with behaviour-based triggers, so the customer always feels like you’re anticipating their needs.
At the top of this post, we outlined the components of an effective retention strategy. Marketo Engage has corresponding features that help you understand, engage, nurture and retain customers and key accounts.
Your retention strategy should…
Marketo Engage can…
|Make a personal connection
|Offer a unique experience
|Engage at the exact right moment
TAP CXM helps brands engage with their audiences on a deeper level. Combining strategy, systems, people, and processes, we co-design an approach that works for our clients long-term.
We’ve seen how the world of customer experience management has changed. And we’re proactively working with tools like Marketo Engage to provide richer, more rewarding experiences.