Five Ways To Increase Customer Retention In 2020
As the year 2020 draws closer, many brands will need to review their customer growth strategies to meet their sales targets. In this op-ed, Customology general manager Michael Barnard explains how customer expectations have changed dramatically in recent years with the competition continuing to up the game.
Next year will be no different. The challenge for many is keeping up with your customers and the competition trying to steal them.
As you’re planning and preparing your marketing budgets for 2020, let’s pause for a minute and consider where and how you are investing your money. Is it on technology? customer attraction campaigns? How much of your budget are you planning on dedicating to customer retention? As that’s the route to genuine customer growth! 80 per cent of your future profit will come from less than 20 per cent of your existing customer base.
We have outlined five simple steps for you to increase your customer retention in 2020 and ultimately grow your revenue today and into the future.
Step 1: Find your best customers
This is where some brands come unstuck. They have so much data but don’t really know what to do with it all, or even the real value it holds. We discussed this in one of our recent articles ‘are you doing enough with your customer data?’.
Through some simple, yet effective segmentation, you’ll get a clearer view of who your customers are, their behaviours, interests and lifestyle preferences. We recently shared the below segmentation model (RFM), which stands for Recency (when the customer last shopped with you), Frequency (how often does the customer shop with you) and Monetary value (how much the customer spends with you).
These three simple measures will give you so much insight into your customers – you can segment them into different groups and begin to have a targeted and relevant conversation with each segment. Here is a model we use:
Superstars: Customers who spend the highest amount and shop most frequently.
Regulars: Customers who have made multiple purchases.
Lapsed Repeats: Customers who previously made multiple purchases, but don’t come back as often as they used to.
Recent One-offs: Customers who have recently made their first purchase.
Lapsed One-offs: Customers who previously made a single purchase, but never returned.
Lost Superstars: Customers who used to spend high and shop frequently but have not returned.
Step 2: Love your superstars and find more just like them
So now you know which customers you cannot survive without, we refer to these as ‘superstars’ right down to the customers that are actually costing you money, and sadly the high value customers who haven’t returned.
Already you’re likely thinking of different ways you would communicate with these customer groups. Referring back to step 1 – how have you communicated to your superstars and active repeats? Did they receive any additional value than the lapsed one-offs? Chances are, probably not!
Step 3: Continue the conversation and measure what matters
Conduct an audit of your previous campaigns and customer communications. Review the messaging (i.e. sale or product focused), depth of personalisation (more than using a first name!).
How often do you take a step back and think about how the customer will feel or react to the marketing message? This is so important! How will it benefit them, add value to them, or make their lives easier? That’s all they care about at the end of the day.
What would you do if you received this email? and what would you do differently if you had the opportunity to resend the email? If you sent the same email to everyone on your database, then there is A LOT you should’ve done differently.
Determine what overall level of engagement you have achieved (including the subscribes/lost customers), how much you spent, and how much ROI you have realised – find the actual number (per campaign if possible).
Step 4: Think beyond the path to purchase
Once you have acquired a customer, what next? They become another number on the database ready to be spammed every other day with irrelevant messages? No, brands have a window post purchase in which the customer will be feeling very positive about the brand (on the assumption they received a good experience). We refer to this timeframe as ‘the moneymoon period. What you do next is crucial – don’t allow buyer’s remorse to set in by delivering a poor post-purchase experience. Instead of sending a generic ‘we have a sale on’ email (nothing worse than receiving one of those after you’ve already made a purchase, or asking for an NPS score – thank the customer. It’s that simple! The customer will feel valued and appreciated.
Instead of dedicating the majority of your budget in the path to purchase, consider the path to re-purchase. How can you build and enhance your relationship with the customer. The more data you have, the more you will be able to predict (and importantly, influence) their future behaviour.
Step 5: Invest in genuine customer growth not just acquisition
We recommend dedicating at least 10% of your marketing budget to keep your existing customers happy and engaged. Keep it completely separate from the rest of your marketing budget. Technology cannot be included in this budget. This is for ad-hoc ways in which you can reward and recognise your customer for their loyalty.
Summary
We understand the intense pressure that marketers are under to deliver. Tasked with sending so many marketing messages per week (or day) to hit the ridiculous KPIs which have been set.
Remember – just because you think something looks great does not mean your customer will. Your marketing needs to be relevant to them. Don’t forget that once a customer unsubscribes, they are lost forever, along with the potential for them to spend in the future.
Create customer segments to help you understand your customers better – once you have this, you will know the best way to continue the conversation with them.
Think beyond the path to purchase, also don’t focus too much on what your competitors are doing. Look for ways in which you can enhance the relationships with your existing customers. Recognise them, and their loyalty to your brand.
Customology are customer lifecycle and retention specialists. Using the customer and transactional data you have already captured; we can help you segment your customers and identify customer growth opportunities. Contact a Customologist on 1300 264 549 or hi@customology.com.au for further information.
Latest News
WARC Names Its Most Awarded Campaigns & Agencies
The WARC Creative 100, Effective 100 and Media 100, a suite of global rankings and the ultimate independent gold standard for marketing communications, are now released featuring the most awarded campaigns, agencies and brands in the world for 2020. Compiled by WARC, the international marketing intelligence company, these annual league tables are produced by combining […]
Agent99 Hooks New Clients In FishMe! And Donna McGeorge
Award-winning independent PR Agency, Agent99, has hooked new clients in online seafood delivery service, FishMe!, as well as productivity specialist and author, Donna McGeorge (main photo). Since launching earlier this year, Sydney’s FishMe! has cut out the middleman and bricks-and-mortar overheads to ensure customers get great quality at competitive prices. The business was founded by […]
What We Don’t Know About Adland’s D&I And How That’s All About To Change
Yes people it's not one, but two censuses (or is that censii?) to complete this year. Antony Green will be pleased.
Menulog Celebrates The Best In Food Delivery With The ‘Menulogies’
Menulog has teamed with creative agency, Poem, and social agency, Connecting Plots, to launch the ‘Menulogies’, a rebrand of its 10th annual restaurant awards. Building on the success of previous years, the awards have returned with updated categories to reflect the latest culinary and social media trends, as well as loads of glitz and glamour […]
Yahoo Appoints Julia Edwards To NSW Sales Director
Yahoo has announced it has promoted Julia Edwards to NSW sales director. Since joining Yahoo 18-months ago, Edwards (main photo) has been instrumental in building the commercial success of Yahoo Creative Studios (formerly RYOT Studios) in her role as head of strategic solutions. She has been behind a number of industry-first campaigns using cutting-edge technology, […]
Jack Dorsey Quits, Parag Agrawal Named New Twitter CEO
Twitter CEO Jack Dorsey has stepped with immediate effect, replacing him, the company board unanimously appointed distinguished Chief Technology Officer (CTO) Parag Agrawal. After almost 16 years Jack Dorsey has decided it’s finally time to leave Twitter. Though, he will remain a member of the board until his term expires at the 2022 meeting of […]
Bob Gallagher Hangs Up His Mic & Bids Farewell To Breaky Radio
Brissie radio icon Bob Gallagher announces his retirement. Adds he has no plans on being a pest like Alan.
History Will Be Kind Wins The Access Group’s Comms
History may well be kind, however, not necessarily to anyone photographed wearing a hot pink tracksuit in the nineties.
CUB & TBWA\Melbourne Launch “Woody & Cola” Campaign That’s Bang On For The Demographic
CUB has launched a new “Woody & Cola” campaign via TBWA\Melbourne. Set to the well-known Escape (The Pina Colada Song), the campaign introduces characters ‘Woody’ and ‘Cola’, who are completely different, yet completely complimentary at the same time – much like Woodstock’s smooth oak-aged, blended Kentucky bourbon with sweet refreshing cola. Following their journey, Woody […]
Podium Announces Australia’s ‘Most Loved Local Businesses’
Local businesses communication and payments platform, Podium, and Council of Small Businesses Organisations of Australia (COSBOA) has today announced the winners of Australia’s Most Loved Local Businesses, which includes a specialised biking store and a stigma-busting dental practice. The campaign aimed to shine the spotlight on a handful of vibrant, dynamic and innovative Australian businesses following an […]
Monday TV Wrap: Nine’s Snackmasters Debuts & Wins Entertainment
Nine’s Snackmasters wins the night in entertainment pulling in 603,000 viewers – if you can watch this without snacking, as far as I’m concerned you are superhuman! In news, news – Seven News hit 949,000 viewers while Nine News had 872,000 viewers. Nine’s A Current Affair snagged the second entertainment spot with 696,000 viewers – Do you […]
Lawrence Mooney’s Clash With Triple M Goes Nuclear
Departed Triple M star Lawrence ‘Moonman’ Mooney would have lawyers salivating as he chases after a $1million-plus damages claim against his former employers. Mooney still had over a year remaining on his contract with SCA before an internal issue led to the popular personality’s abrupt departure from the airwaves. It’s believed his salary for 2021 […]
Decoding Creativity And Effectiveness
Spikes Asia talks with chief creative officer at Performance Art, Ian Mackenzie (main photo), about his Spike award winning campaign, ‘Publicly Traded’… When creativity is effective and effective work is creative, it has even greater power to positively impact people, brands and the world. Spikes Asia brings weekly insights from award winning creators of inspiring […]
How Twitter Is Raising The Bar On Brand Safety
People are at the centre of Twitter’s brand safety policies. By putting people first, Twitter is creating a safer space for brands to engage with the right audiences, at the right time, with the right conversations. As a platform where people come to participate in conversations, connect with others, and get information they can trust, […]
“45% Of Adland’s C-Suite Now Female!” MFA Releases Results Of Diversity, Equity & Inclusion Survey
Media agency members of the Media Federation of Australia (MFA) have completed the industry’s second annual DE&I survey, providing a holistic view of progress in the area of diversity, equity and inclusion. The aim of the survey – conducted in partnership with Mediai and completed by 2,203 individuals working in Australian media agencies – is […]
Ethical Cosmetics Company Lush Closes All Social Media Accounts
Ethical cosmetics chain Lush has boycotted social media over concerns it is having a negative impact on teenagers’ mental health. The cosmetics company closed down all it’s social media accounts last week, consisting of Instagram, Facebook and Snapchat. It’s a pretty big deal considering The Guardian, reported that Lush has amassed over 10 million followers […]
Cummins&Partners’ Paul Murphy Joins iProspect As Its Melbourne MD
Oliver Rapson, CEO iProspect Australia, has announced today the appointment of Paul Murphy as Managing Director, iProspect Melbourne, a new position for the office.
UnLtd Announces Open Applications For 2022 ‘Ambassador For Good’ Program
UnLtd and Yahoo’s inaugural Ambassador for Good program has come to a close for 2021, with the call for applications being sent out for next year. From over 80 applicants, 16 individuals from across the industry were selected into the launch initiative to use their skills and networks for good. Over the past year, the […]
Celeste Barber Teams Up With Bras N Things For A Relatable Lingerie Collection
Comedian and social media star, Celeste Barber has collaborated with lingerie brand Bras N Things for a relatable and wearable lingerie collection. Barber’s collaboration with Bras N Things is bright, vibrant and fun. It’s relaxed and comfortable but there is also plenty of drama and sass. Barber worked closely with the Bras N Things team […]
Creator Company Jellysmack Expands ANZ Team
Global creator company Jellysmack has announced its latest Australia and New Zealand team members as the company accelerates its growth plans in the region. Last month, Jellysmack launched its popular creator program in Australia and New Zealand and prioritised the region as a key growth market within the $US100 billion creator economy. The VC-backed technology […]
Exceptional Alien Joins Forces With Tourism NZ Launching Aotearoa Country Special
As this press photo taken in Clovelly, Sydney, will attest, NZ may be the last place on earth we're allowed to enter.
Mix 94.5 Partner With Starcom For Masters ‘Milk Carton’ Regatta
Bega’s flavoured milk brand, Masters, saw the return of its iconic Western Australian event over the weekend, with locals taking to the water at Hillary’s Boat Harbour in Perth, to race watercrafts made from Masters milk cartons. The ‘Masters Milk Regatta’ this year partnered with SCA’s Mix 94.5 station – with Starcom overseeing media strategy, […]
Love Island Australia Dumpees Join Tinder For One Night Of Swipes
Three dumped islanders from the Love Island Australia Villa will be joining Tinder for an exclusive in-app experience, ‘Swipe Island’, looking for another chance to find their lucky match. Between 6pm-11pm tonight, Aussie Tinder members will have the final chance to participate in the virtual ‘Swipe Island’ experience and match with ex Villa babes including […]
Nestlé Australia Announces Switch To 100 Per Cent Renewable Energy
Nestlé Australia has announced it is switching to renewable energy, meaning Aussie favourites, KitKat, Milo, Allen’s, Uncle Toby’s and Purina will now be made at 100 per cent renewable energy-powered factories. Nestlé Australia’s announcement comes four years ahead of its original global target of 2025. The company partnered with CWP Renewables to make its first renewable power […]
“It’s An Important Win For Seven” Seven’s James Warburton On The Networks 2021 Ratings Win
Seven boss chats with B&T on 2021 ratings win. Although we suspect he may have been looking at new Ferraris online.
“We Don’t Create Content For Total People!” Nine’s Michael Stephenson
B&T always loves a chat with Nine's Michael "Stevo" Stephenson. Although he does ask we call him Mr Stephenson.
Cocogun And UTS Announce New Scholarship For Indigenous Creative Students
It may be Australia's ugliest university, but UTS is proving its still has a heart of gold with this top initiative.
Why We Need More I In Team
Here's a top piece by the Ad Council's Hannah Sturrock that deserves your attention. Well, more than a passing glance.
Audience Group Among Several Agencies To Make AFR’s Fast 100 List For 2021
In good news for the industry, a number of agencies make the AFR's Fast 100 list. Still, not as many as tech companies.
TV Ratings Yearly Wrap: Seven Wins Eyeballs & Nine Claims Demos
Seven crowned 2021's ratings winner. Not stopping Nine execs doing their best to get their bonuses by claiming demos.
