Here’s a riddle for you.
Returning and repeat customers generate higher revenues than new customers, according to sources including Adobe. And according to research by Bain & Company, increasing customer retention rates by 5 percent increases profits from 25 percent to 95 percent.
But companies historically focus less on customer retention than acquisition. For example, “retail marketers spend the bulk of their digital ad budgets acquiring new visitors, primarily through search and display advertising.”
Can anyone explain why?
Lost Loyalty, Lower Lifetime Value
I don’t know about you, but these statistics don’t make me very motivated to stay brand loyal. I want my “brand” to continue to worry more about keeping my business — and keeping me committed and interested — than trying to lure new customers.
To promote greater loyalty, companies and brands need to reassess their marketing spend and provide better experiences for their existing customers.
Customers today seem to be “experience loyal.” They are constantly looking for online and offline experiences that make them feel unique. And that raises the important issue of personalization.
Embrace Personalized Marketing
In fact, it’s never been more important to personalize your customer messages. Ideally, marketers should craft strategies that target customers based on their personal buying behaviors. Consider giving discounts on first purchases but continue to reward existing customers with relevant monthly discount codes or coupons.
But how can businesses accomplish these tasks efficiently?
One suggestion is to add a solution like SessionM to your marketing technology (MarTech) stack.
SessionM is a customer engagement platform provider that aims to maximize the lifetime value of your customers. It promotes a four-pillar loyalty cloud, which gives real-time insights that help businesses scale and personalize content.
The four pillars include:
- A customer data platform, which allows you to create profiles on your customers and gather interactions in real-time.
- Engagement orchestration, which uses that data to optimize customer interactions through multi-channels including: email campaigns, SMS, and in-app messaging.
- Total offer management, which includes what you are offering customers across channels and allows you to send personal offerings based on the customer’s tastes, buying habits, and location.
- Loyalty management, which provides rewards to customers based on frequency of purchases.
Better Personalization = Happier Customers
Take a minute to think of a brand that sends you personalized offerings — a brand that you happily patronize solely based off how they make you feel.
While you’re thinking, let me tell you a quick story.
I have a friend who is an avid coffee drinker. She can’t get through the day without at least three cups. So it seems the Starbuck’s app has replaced me as her best friend.
She’s a gold level member and finds joy in seeing what crazy expensive drink she can come up with when she finally is rewarded with a free drink, which happens way too often.
She picks Starbuck’s over less expensive coffee shops because the company values her business as much as she values its coffee.
She likes that the app saves her new, favorite drink — so she won’t forget every pump of vanilla she put in it. It also allows her to find new drinks based on the season. Also, the app sends her location-based notificationsso she never has to search for a store for too long.
SessionM and Arke
Starbucks is a SessionM customer.
Starbucks uses SessionM’s machine learning and artificial intelligence (AI) to analyze and create profiles on each of its customers. It uses this data to send out campaigns within hours of purchase. Each campaign is personalized to the specific customer based on their taste profile.
What company popped into your head when I asked you about effective personalization? Was it your company? If not, why?