Proof That Marketers Who Excel at Customer Retention Really Do Think Differently
We are always trying to help our clients think long-term. We know everyone has quarterly (and often more-frequent) goals, but we also know that sustainable, profitable growth doesn’t happen on a quarterly basis. It happens over the long haul, with a focus on customer lifetime value. Not customer-this-week value.
Little did we know that the very people who are probably most likely to become Sailthru clients are already more likely than their peers to be thinking long-term. About long-term profitability, in particular. Lucky for us, and, of course, for them.
Here’s how we discovered this. Sailthru and Forbes Insights recently surveyed 300 retail and media executives to discover how they approach customer retention and how they leverage it throughout their enterprises. We found that 14 percent of companies favored retention over acquisition, so we called them the retention gurus. Another 14 percent did just the opposite. They favored acquisition over retention, so we called them the acquisition athletes.
One of the questions we asked had to do with customer strategy as it relates to growth. We wanted to know which criteria organizations considered when it came to this important topic. There’s lots of good stuff here (keep reading!) but the one statistic that jumped out at us first had to do with long-term profitability. Overall, one-third of the respondents said they considered long-term profitability growth when formulating customer strategy as it relates to growth. But the retention gurus were overachievers. Forty percent of retention gurus considered long-term profitability, compared to just 26 percent of acquisition athletes.
Obviously, there’s lots of room for improvement within both groups of marketers. But long-term profitability growth is key – in the end, that’s what’s going to make or break your company. On the revenue side, retention gurus were just slightly more likely to look at long-term revenue growth (49 percent) than acquisition athletes (47 percent).
A different mindset
There’s lots of other evidence that the two groups of marketers diverge in their approaches in significant ways. Retention gurus, for instance, are more likely to consider data and analytics when formulating their customer strategy as it relates to growth. While we might find it shocking that anyone would ignore these, only 65 percent of acquisition athletes, and 72 percent (somewhat better) of retention gurus say they consider data and analytics.
There are also signs that retention gurus are more willing to break from the pack to try a new or innovative way of charting their strategy. Yes, the dreaded HIPPO (highest-paid person’s opinion) is still influential, with 56 percent of the retention gurus and 58 percent of the acquisition athletes saying they consider the experience of the executive team. But a whopping 84 percent of acquisition athletes, compared to 63 percent of retention gurus, admit that inertia is a factor, agreeing with the statement, “we do it the way it has always been done.”
Retailers were more likely to suffer from inertia (80 percent agreed they do things the way their organization always has) than media companies (71 percent). Acquisition athletes are also more likely to look to their peers for confirmation, with 81 percent comparing themselves to industry standards. Just 58 percent of retention gurus do the same.
It’s always nice when data confirms something you’ve suspected all along. Here’s what we’ve suspected: Our clients are an unusually forward-thinking, innovative group of marketers who are in it for the long haul. What the data says: Yep.