It was difficult to understand which marketing programs produced the best results in the past. This is not the case today. Marketing departments have an inordinate amount of data. However, the key to demonstrating ROI in Marketing is using the most recent tools like marketing automation and all of the data that is available to modern marketers to make the right business decisions.
Marketing is about retaining customers. Marketing is often about acquiring new customers. However, marketing that focuses on maintaining existing customers can provide a higher return on marketing investment.
Marketing automation tools give marketers the data and insights they need to understand how to retain customers, how to get more of the right type of customers, and how best to market to achieve the results executives want.
Marketing objective: Customer retention is vital
Marketing programs often have three main goals: Brand Awareness, Engagement and Conversion.
However, there is an additional objective that is often overlooked: Customer retention. Despite the fact that there is so much research that shows that acquiring new customers is five to 25 times more costly than keeping an existing customer.
This makes sense when you consider the fact that retaining a paying customer can be easier than finding, convincing, and converting new customers.
Bain & Company's research revealed that it is six to seven times cheaper to acquire a customer than to retain an existing one. Profits can be increased by 25% to 95% by increasing customer retention rates. It is important to keep the right customers. It could be the best way for marketing to show its value to the C-suite.
What is retention?
The retention rate measures how many customers continue to use your product over time. Other companies use churn rates to measure retention. The percentage of customers who leave within a certain time frame.
This is something most companies consider annually, but it might be important for companies that invoice monthly.
Investors use retention and churn rates to assess the firm's underlying health. Investors are more likely to question the viability of a company if the churn rate is higher (i.e., if there are more customers who choose to leave after signing up).
Customer loyalty and retention are so important for measuring marketing's overall value.
Companies that are at the top of their game are using customer retention to make sure they acquire the right customers, predict the return on marketing, and drive sales and financial forecasting.
Marketing automation: How it provides the data required to measure retention
After a customer has been acquired through all marketing touch points, marketing automation provides the data necessary to determine what customer spends, how often they use your product or service, when and why they leave.
Many companies have found that customer service issues are the most common reason customers leave. This analysis can be used to target customers that might abandon you and offer them additional services like training.
Marketing automation can help determine which offers, channels, topics, and content are delivering new customers at what price. It can also determine which programs or variables are driving customers to stay longer and spend more.
Getting the right customers first
Companies make the biggest mistake when they analyze retention rates. They fail to recognize that high churn rates are due to poor customer acquisition efforts.
Many businesses are simply not attracting the right customers. If price is a major factor in a decision, this can happen. Marketing programs that target deal seekers will result customers who leave as soon they find a better deal.
Once you've determined that you have a retention issue, you can now consider whether you might have an acquisition problem. Marketing is about acquiring and keeping customers that you can offer value to and are valuable to your company.
Marketing automation data: How to drive retention
Marketing automation offers a variety of data points that can be used to increase marketing ROI, customer loyalty, and retention.
- Overall marketing effectiveness:marketing automation lets you measure overall marketing ROI. Key performance indicators like program budget, results and offer performance, as well as leads generated, closed deals, can all be viewed. These indicators can then be linked to the retention rate and spend levels of various customer segments.
- Marketing mix.marketing automation can not only provide overall results but can also be used to determine the best mix of awareness, conversion, and retention campaign approaches. You can create the best mix of activities that will generate the greatest return by using data from marketing automation.
- Customer service and sales insights: Marketing automation data can be very useful to customer service and sales teams in determining which prospects should be followed up and which customers may need additional support.
- Content messaging and messaging: Marketing automation data and insights are key to understanding which programs and marketing mixes drive the greatest value. They can also help you identify which marketing messages and content resonate most with customers who spend more and stay longer.
Marketers can use the data today to target the right customers with their investments and programs. Customers who receive the greatest value from your solutions, and return the favor through customer retention, loyalty and higher revenue, as well as referrals.
Customer retention and loyalty are often overlooked marketing objectives. Marketing automation and the data and insight it provides are allowing the most successful marketers today to fulfill their promise to market: obtaining and keeping the right type of customers.
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Marketing Insider Group's post Customer Retention – The Lost Art (and Science) of Marketing appeared first.
By: Michael Brenner
Title: Customer Retention – The Lost Art (And Science) Of Marketing
Sourced From: marketinginsidergroup.com/strategy/customer-retention-lost-art-science-marketing/
Published Date: Mon, 10 Jan 2022 14:00:00 +0000
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