Why the Focus on Customer Acquisition Has Left CMOs — and Customers — Unsatisfied
Marketers could learn a lesson from eHarmony when it comes to (customer) relationships: new relationships are important, but what really matters is lasting relationships.
New research by The CMO Club, in partnership with Signal, drives this point home. The survey, “Why Customer Identity Matters for Great Customer Experiences,” queried U.S. CMOs and senior marketers at top B2C brands about their marketing and customer experience priorities for 2017.
Dollars go to acquisition — customer loyalty gets short shrift
In the survey, 74% of marketing executives said Growing new customer acquisition is one of their top objectives. This is clearly driving their spending decisions: the survey found that 46% devote more than two-thirds of their marketing budget to new customer acquisition and 90% commit more than half.
But is all that spending on acquisition delivering the profitable, loyal customer base that every brand needs to thrive? It appears not.
When asked about the marketing metrics that need the most improvement, more than half of marketing execs said they’re unsatisfied with their brand’s performance on loyalty metrics like customer retention rate, customer lifetime value and Net Promoter Score®. Presumably seeking to address those concerns, 44% cited Increasing customer loyalty and retention as a current top objective, while 36% cited Increasing customer engagement.
The survey results point out a striking dichotomy: while marketers are focused on acquiring new customers, they recognize that their customer retention rates and other brand loyalty metrics are falling short. There is a pressing need to do a lot more to engage and retain their customers after the initial conversion.
The research found that the majority of B2C marketers are still climbing the learning curve when it comes to using their customer data to build stronger customer relationships. They understand the critical role of identity data in powering customer recognition and delivering exceptional experiences, but many of them are stuck at the starting gate.
Consumers have high expectations —marketers need customer retention strategies to keep up
In today’s Engagement Economy, consumers demand not just products but great experiences. Not just ads and emails but a brand narrative that is personally relevant and brand interactions that are connected across channels, devices and touchpoints. Ultimately, customers want to feel recognized, appreciated and understood.
In the study, CMO Club and Signal interviewed marketing executives at Gap, Turner, MetLife, Payless Shoesource, Princess Cruise Lines, American Express and Cirque du Soleil to discover the strategies they’re using to identify customers at a 1:1 level and create individualized experiences that create long-term loyalty. They are leading the way in showing that increasing sales from existing customers is just as important as what you do to acquire new customers.
Brands that can’t identify their fast-moving customers across all of their digital and physical world touchpoints? Well, they won’t be able to provide relevant, positive experiences. They risk losing their customers as fast as they acquire them.
Being able to recognize a customer across time and channels, and speaking to their needs and preferences, is essential for customer retention, loyalty and relationship building. With today’s consumers, it’s the marketing equivalent of going on a date and remembering your girlfriend’s name, her favorite movie and beverage preference.