Loyalty & Retention: Leaders are concerned
According to a new guide, CMOs are prioritising customer acquisition efforts despite an urgent need to engage and retain the customers they work so hard to win.
The guide, “Why Customer Identity Matters for Great Customer Experiences,” is based on a survey of 61 marketing executives, heads of marketing and CMOs and was produced by the CMO Club in partnership with Signal. The item features interviews with marketing leaders from major brands including Gap, MetLife, Payless ShoeSource, Princes Cruise Lines, Turner, American Express and Cirque du Soleil.
The research found that loyalty, retention, and churn weigh heavily on today’s marketing leaders. The majority of CMOs say they are unsatisfied with customer retention rates (61%), customer lifetime value (58%) and Net Promoter Scores (53%). Despite that, most aren’t doing enough to decrease churn and capture increased consumer wallet share: 44% of CMOs say that they spend 30-50% of their budgets on retention and loyalty, while another 33% spend only 10-30% of their budgets on existing customers. However, interviews with marketing leaders suggest the tide is turning.
“In a highly competitive landscape, retention is more important than ever. Not only are loyal customers a brand’s strongest advocates, but retention drives compelling business outcomes. To increase loyalty, marketing must be as sophisticated as consumers, who shop across all channels and interact however they want, at every stage of the journey,” said Ellen Junger, Chief Customer and Marketing Officer, Payless ShoeSource.
Marketing leaders understand that to deliver experiences that will build loyalty and prevent churn, they must be able to identify and engage customers with contextual relevance across all touchpoints.
According to the research, CMOs realise that the key to delighting customers with positive, relationship-building experiences is truly knowing customers across touchpoints and time. Respondents rank customer identity data as the most important asset for delivering a tailored experience. Integrating identity data – which is often siloed across tools, platforms and vendors – into a single customer view was also ranked by respondents as most critical to delivering relevant experiences.
“One of the top conversations at CMO Club Dinners is the fact that consumers today are faced with so many choices that loyalty and retention can be challenging for marketers to foster,” said Pete Krainik, CEO & Founder, The CMO Club. “Consumers can be very fickle, and while CMOs might not be satisfied with where they are at in retaining customers, acquisition is sometimes easier to tackle. This study reveals that CMOs increasingly realise that retention is the path to business success, and the tools to help them deliver great, loyalty-building experiences do exist, with customer identity as the underlying layer to fuel it.”
Most respondents do not yet have the technology in place to harness the power of identity. Only 33% say they have integrated disparate platforms to create holistic customer profiles. Additionally, just 25% can combine historical data and real-time customer context across platforms, and a mere 19% say they are able to identify the customer across all touchpoints.
“The fate of brands lies in the marketers’ ability to identify customers – their wants, needs and place in the buyer’s journey – and reach them with contextual relevance at all critical marketing moments. In the age of the customer, when loyalty is critical and churn is a costly risk, the brands left standing will be those that prioritise identity across the enterprise. With identity, marketers gain control, flexibility, and knowledge from a strategic foundation that can power all experiences,” said Mike Sands, CEO, Signal.
Interview respondents reported that organisational issues are one of the biggest challenges in tackling customer identity. Creating a customer-first mindset, aligning with the CIO, and creating internal focus groups are among the steps marketing leaders are taking to overcome organisational barriers.