Customer retention: The key to catching long-tail returns

When customers are taken for granted, they have a knack for disappearing. It’s one thing to set our annual marketing targets based on incremental growth; to hit the lead count, to increase the base, hypothesise on the CTA, ideate with the team, execute, measure, rinse, and then repeat.

But, in a time when the world is moving so quickly, is this playbook still in tune?

If you believe the demand curve has been impacted enough to compromise trade in the next cycle, then it’s worth thinking about how you can better retain your existing customer base. If market demand has been compromised, optimising your marketing program may not be enough to recover the opportunity lost.

Businesses creating their own certainty during these uncertain times are using opportunities provided by changed consumer spending.

Companies among Financial Services and Health Insurance have used this time to focus their team output towards long-tail returns. Rather than campaigning, or driving acquisition, these businesses have focused on their existing customer base, building on initiatives that strengthen engagement and retention.

Further still, many businesses have seen an uplift in growth during this economic event. Retailers, particularly among health, beauty and home improvements have seen a rise in sales and online demand. The question then becomes, how do you retain that base growth?

Whether this has been a time of expansion or contraction for your business, those creating certainty among chaos have one big thing in common — a decisive focus on customer retention.

So, what does a great retention program feel like?

1. Clearly defined retention measures for your business

Does your membership model mean that customers churn after their subscriptions lapse? Do your customers continue to engage with your brand after a transaction? Do you misappropriate opt-out with the churn of your customers across your channel-agnostic base?

2. Delineation of roles and responsibilities around your retention program

Do your marketing team share their eDMs with your sales or account management teams? Do you have frequency caps to ensure that your customer facing teams don’t all contact the same person at the same time?

3. Shared meanings & language

Do you differentiate between churn and opt-out? Does your business require a retention strategy or an engagement strategy? Does everyone understand what a ‘persona’ and a ‘buyer type’ mean for your business?

4. Support at every level of your organization

Does your product team realise the importance of declining sentiment on Facebook? Does your sales department see customer retention as a target or a goal? Have you got a business case to quantify the return of retention for your business?

5. A focus on being human

Does your team use their tools to check a box or create relationships? Does your team understand the importance of frequency? Does your business have an established tone of voice?

After working across many industries in the discipline of Customer Strategy, I’m grateful to have seen programs that made me feel richer for having spent time with that business. I’ve also seen programs less focused on customer needs. It is from this breadth of understanding that I can see how these five principles result in our ability to create a meaningful connection with customers.

Many businesses haven’t covered their bases and said ‘thank you’ to their customers. They don’t have a way of ensuring follow-ups are meaningful, or they haven’t articulated a timeless framework that guides what retention means beyond tactical executions.

It’s this point.

This is the point where we get torn between the obligations of our insurmountable to do list. This is the point when we forget to say, ‘thank you’. This is the point where we take our customers for granted.

So, allow me, not to make this age-old mistake. If you’ve made it this far, let me thank you for your time spent reading. I could talk for days on the topic of retention, so if your time permits, I’m always around for a chat on LinkedIn or over email: eegerton@thelumery.com.

About The Author: Emma Egerton, Head of Customer Strategy at The Lumery.