The rise of predictive analytics has brought many benefits to marketers. The tremendous amount of both real-time and historical data available about customer behaviour has afforded them the unprecedented ability to anticipate customer needs as opposed to merely respond to them. It has also enabled them to build ideal customer groups and target promotional materials. Marketers can easily identify the characteristics of their ideal/most likely customers, discover what they are like and what is likely to drive them to purchase, and entice them to open accounts and begin what will be a hopefully long lasting relationship with promotions appropriately tailored to their desires.
This has, for many, led to improved brand experience and increased sales. However, while predictive analysis is undoubtedly one of the most exciting tools in marketing, its widespread adoption has led to a strange situation whereby non-customers are valued more than actual customers, in which the onus for many marketers is to bring in new customers rather than retain the old ones. In a recent interview with Forbes, Shreesha Ramdas, CEO of Customer Success Automation startup Strikedeck, explained that this is happening for four reasons: ‘1) the number of solutions on the demand gen side
Focusing on new customers at the expense of
Another reason customer retention is so important is simply that it is so much cheaper than acquiring new
This is backed up by a huge body of research, all of which shows greatly increased ROI to those who prioritize their loyal customers. According to Forbes Insights/Sailthru, companies that increased their spend on retention in the past one to three years saw an almost 200% greater likelihood of growing market share compared with those spending more on
Despite the rewards, many marketers are still failing to consider their current customers. Sailthru’s research also revealed that only 18% of companies focus on customer retention and conduct strategic customer marketing. This is something companies are beginning to appreciate, though. A recent eMarketer report found that the majority of US marketers plan to allocate more of their budgets to customer loyalty in 2017, and about 13% anticipate raising spending significantly.
All of this is not to say that marketers should completely forgo any attempt to look for new customers and appeal to them. It is, however, to say that the best way of doing this is by appealing to your current customers. This will not only ensure loyalty, it will mean that a large part of the job of attracting new customers is done for you through word of mouth. It will give you an audience more receptive to your social media campaigns and more likely to share posts, an audience less likely to complain and to be more tolerant of your mistakes, and - most importantly - an audience that is going to consistently spend money with you.