Retention ROI: Retailers’ Secret to Success
- Marketing importance. Retention-focused customer marketing is vital for retailers’ survival and growth.
- Leadership disconnect. Only 25% of senior marketers feel leadership values customer marketing.
- Reporting evolution. Agile, real-time data analysis can elevate customer marketing and prove long-term value.
Recent research shows increasing customer retention rates by just 5% can increase profits anywhere between 25% to 95%. As such, strengthening relationships with customers through personalized and targeted customer retention marketing has become fundamental to the survival — and growth — of retailers.
But, when we asked 200 senior customer marketers if they believed senior leadership fully valued the role of customer marketing compared to other areas of the business, only 25% believed they did.
Why? Well, one possible explanation is because performance marketing — which focuses solely on acquiring new customers — has traditionally been viewed as more important to business growth, and therefore more important to senior leadership. But, there’s a second explanation — one that customer retention marketers can start addressing today: reporting.
Our research showed that only 23% of marketers are satisfied with their business intelligence (BI) tools’ ability to show the impact of their campaigns. This dissatisfaction seems to be resulting in over half (55%) of marketers agreeing their customer marketing team is inadequately funded.
Yet, for customer marketers to effectively communicate their value to senior leadership, they should spend their time reporting on the metrics valued by senior leadership teams. Similarly, they should report these in an agile way. That’s the secret to cultivating engagement — and even investment.
Hitting the Right Customer Retention Marketer Chords
Metrics like click-to-open rate (CTOR), click-through rate (CTR), customer lifetime value (CLV) and return on advertising spend (ROAS) are important. Reporting on short term revenue gains will always be key for customer marketers.
But, the problem with reports that only factor in these metrics is that they lack incrementality. That is, evidence on the positive, long-term impact customer retention marketing campaigns are having on customer behavior. The metrics previously mentioned don’t communicate to senior leadership how customer marketing is contributing to overall business success.
For example, using control groups to test different factors that influence the success of email campaigns and measuring their effectiveness can showcase customer marketing’s impact in the long term. Truth be told, this level of reporting rigor and insight could be far more valuable to senior leadership than immediate transactional data.
Ultimately, retail marketing isn’t just about generating short term, one-off sales. It’s also about ensuring you’re keeping customers engaged with the business — especially the ones that could become more valuable over time. As such, traditional customer marketing metrics should evolve into demonstrations of the long-term impact programs are having on positively influencing customer behavior. In other words, evidence that indicates your team is getting customers to behave in ways that will result in long-term value.
Introducing detailed metrics that indicate a customer’s future value, the likelihood of repeat purchases or how campaigns are reinforcing positive behaviors, could be far more valuable. Similarly, measuring the diversification of the brand experience across categories can elevate customer marketing reports even further.
Related Article: Boost Customer Retention: 6 Proven Strategies to Ensure Loyalty
Agility Is Fundamental to Uncovering Insights
Clearly, reporting beyond short-term revenue gains is more robust and forward-thinking than the traditional forms of reporting that have left customer retention marketers undervalued. But, to make these reporting upgrades a reality and ensure true business impact to senior leadership, teams need to develop a level of agility that is only gained through access to unified, real-time customer data.
The reason is simple: This data can uncover vital insights into customers’ ever-changing behavior and how customer marketing activities are actually influencing that behavior. Essentially, it helps encapsulate the long- (and short-) term impact customer marketers are having.
It helps gather the right insights for their campaigns with agility. Likewise, it enables teams to effectively track the impact of their campaigns in accordance with the most advanced key performance indicators (KPIs).
Yet, to access unified, real-time customer data and deliver advanced reporting nimbly, customer marketing needs the right people, processes and technology in place — which is no mean feat.
It requires the right technology to process first-party customer data in real time. It also needs teams to have the right skill sets to analyze data, leverage actionable insights and generate compelling customer marketing campaigns. And, finally, the right processes to develop streamlined ways of turning data into actionable insights that can drive positive customer behavior.
Related Article: Customer Retention Strategies for Driving Loyalty in Uncertain Times
The Good New About Customer Retention & Real-Time Data
The good news is that, once customer marketers access unified real-time customer data, it’s not just reporting that can become more effective. Campaigns too will become more effective.
Unified real-time customer data will also enable customer retention marketers to unlock valuable insights into what activities are positively impacting behavior, driving strategic, agile optimization of marketing programs. And, in turn, helping bolster the results to ensure the value they’re driving. A win-win.
Learn how you can join our contributor community.