Recession indicates retention. The solution (as everyone knows but few seem to practice) to the problems brought about by a severe downturn is first concentrate on what you have, not what you might have. Marketers must – must – get retention right, for a variety of reasons.
- It’s where your current revenue is
- It’s where the lowest hanging fruit for additional revenue is (all you have to do is not screw up, then ask for more business)
- It’s where your biggest advocates lie
- It’s where your data sits
- It’s the biggest source of prospective customers for your competitors
and so on. Reducing churn protects your customer base against better offers or a better story from your competitors, and yes, they’ll try anything. But customers have a certain amount of inertia. Once they’ve started a relationship with a brand they’ll only move through lack of appropriate attention or if you don’t deliver on what’s been promised, so retention starts with not offending customers. ECRM creates stories that will keep customers engaged, and great eCRM creates stories that massively increase engagement and not only reduce churn to near-zero but increase purchase frequency, average transaction value, and active advocacy.
The customer relationship management bit of eCRM isn’t the whole story.
Buried in the above list though is a gem. “It’s where your data sits”. Your best source of information – not just for segmentation strategy – about who’s likely to spend more is your existing customer base. The data you already own can tell you how to run extraordinarily efficient acquisition campaigns.
(By the way, many people in digital have long thought that acquisition campaigns are a load of rubbish because generally they’re about feeding huge numbers of people into a funnel in the hope of converting the few people who, more or less by accident, have been hit at the right time to buy.)
By combining the segmentation that’s been created for eCRM programmes that focus on retention with the data that gets collected on how those segments behave over time in reaction, we suddenly have a potential gold mine. Great eCRM doesn’t just retain, enhance, increase – it tells you how to acquire. The new, richer data tells you which types of people are most likely to be movable from low-value to high-value. And this in turn tells you what kinds of people you want more of. And that, put simply, tells you where to spend your money to increase your feed into the improvable segments. ECRM suddenly becomes not just about retention marketing, but about all marketing.