Welcome to the Dove Direct Print and Marketing Blog. Today's post, "B2B Marketing with Customer Retention Content," highlights the strategies in play to retain customers in 2021. Age-old statements such as "A bird in the hand is worth two in the bush," or "it's cheaper to keep it," rings true for all marketers, particularly B2B because it will be more challenging to identify, locate, develop and build new relationships. The art of keeping a customer happy while ensuring that they also remain brand loyal, coupled with the ability to up-sell them efficiently and possibly often, will make an incredible difference throughout 2021. Early on, manufacturers and the like quickly concluded that it is far less expensive to sell to existing customers than to board new customers. However, in the age of the pandemic, customer retention is of heightened importance for any bottom line or growth strategy. Business 101 teaches us that any company's primary rule is to retain customers and create a loyal, trustworthy relationship with them. Retention, in the long run, reduces customer boarding costs.
Quote of the Day: "It is not your customer's job to remember you. It is your obligation and responsibility to make sure they don't have the chance to forget you." – Patricia Fripp
Interestingly, within the scope of retention versus acquisition, and backed up by data, only 18% of businesses focus on retention, while conversely, 44% of companies focus on acquisition. Furthermore, 40% of companies and 30% of marketing agencies demonstrate a somewhat equal focus on acquisition and retention.
Acquisition Versus Retention
This lopsided focus on acquisition versus retention is tantamount to product cannibalization in many respects. While it is less expensive to retain a customer, most organizations focus on acquisition, often at the current customer's expense! Believe it or not, the cost to attract and board a new customer is five times more expensive than the cost of retaining a current customer. When you add up the cost of acquisition and apply that cost to the number of new business clients the business has identified as reasonable sales goals, it can become quite expensive.
The reason it is so costly goes back to the days of mass reach marketing when it was much easier to reach the masses. There were fewer channels, and the industry had a captive audience. The world was less complicated, and the consumer did not expect much as a loyal customer. However, marketing has become much more complicated. There are hundreds, if not thousands, of marketing channels to reach the masses which exist in niche markets. The result? Marketing investment dollars don't go as far as yesteryear. Therefore, the emphasis should be spread across both, with retention requiring and deserving a larger share than acquisition throughout 2021.
Best Customer Acquisition Channels
Marketers can apply customer acquisition content to almost any advertising medium. However, some mediums perform better given the proliferation of channels, marketing climate, and evolving consumer behavior.
Marketers should be cautious when referencing data regarding the best channels for customer acquisition. First and foremost, ensure that the data is stable, trustworthy, and categorized. Further, once the channel(s) have been selected, monitoring those media choices against the results and the data that suggested those particular mediums can enable those facts to be born out or not.
The channels that most brands have been utilizing for customer acquisition are the following:
89% - Website
81% - Email
72% - Social Media
66% - Direct Mail
65% - SEO/PPC
60% - Web Banners
34% - Mobile Devices
32% - Aggregator Websites
18% - Price Comparison Websites
Customer Lifetime Value
Customer lifetime value (CLV), while an important metric to understand, or even the ability to measure CLV, remains at only 42%. Just 42% of organizations have put forth the ability to calculate CLV to some degree of accuracy.
CLV represents an important metric that can help ascertain how much of an investment in customer retention is needed. More importantly, CLV makes budgeting smarter, thereby avoiding flying by the pants' seat or acting on gut feelings or intuition.
The bottom line for brands and marketers should be to determine and secure the customer's lifetime value in dollars and brand loyalty. Keeping an eye on CLV and the ability to measure it is more important now than ever before. Keep in mind that the probability of selling to an existing client comes in somewhere between 60 to 70%, whereas the likelihood of landing a new client is a mere 5 to 20%.
Most Effective Digital Strategies for Customer Retention
Customer retention strategies and tactics tend to use fewer resources and investments. Existing customers are far easier to target, reach, and engage because they are already in the brand's community. They know and support the brand. Furthermore, they more than likely depend on the brand for anything in the brand's wheelhouse that consists of solutions, services, and products.
The following numbers represent the most effective digital marketing mediums for targeting customer retention:
56% - Email Marketing
37% - Social Media Marketing
32% - Content Marketing
26% - Referral Marketing
13% - Search Engine Optimization
12% - Display Advertising
08% - Mobile Advertising
07% - Digital Video Advertising
06% - Affiliate Marketing
04% - Paid Search
If you notice, many of the same channels are interchangeable for acquisition or retention. The primary differentiator, more companies spend more on the acquisition side while spending far less on retention. This lopsided investment is a real profit hammer. An increase in retention rates by a mere 5% will increase profits by 25 to 95%, according to Invesp.
It should now be clear that there is a vast difference between marketing for customer acquisition and customer retention. That means each designation's creative and content should have specific messaging that differentiates the content for each target group. Thanks for stopping by and taking a moment to read "B2B Marketing with Customer Retention Content."
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