We were speaking with a Client's chief executive today, an individual who we are only just getting to know, but someone who is well seasoned and whip smart. We're a month into a strategic engagement to help them with what could be a pivotal decision point for the Brand, and this executive was jumping in to get to know us. In the course of our chat, we were informed that (and we're paraphrasing here with some editorial liberty, but this is what we heard in essence):
Retention marketing is a broad term that means so many things, I'm not sure it means anything at all.
Well, you know what they say, "the client is always, right," right? That's a tough one, because in many instances we're retained to help provide insight as domain experts in our field, and if it runs afoul of what the Client believes, then at best we can hope to help them on a journey of self-discovery. So, of course we didn't dare take exception.
However one thing stuck with us. This executive chided that in speaking with many colleagues and friends on Boards of, and running some of the largest consumer brands on the planet that they almost uninamously agree that if they had to do it all over again, they would rather spend money they invested in retention and loyalty programs elsewhere because the programs did nothing for their bottom line by serving customers already loyal who didn't need a discount to continue buying.
Well, as you can imagine there is so much wrapped up in that comment its hard to know where to begin. But that did get us thinking, and we decided to push this out to our readers, just in case you have someone on your own executive team who believes all this relationship and retention marketing stuff is "a bunch of hooey."
Next week we're sending one of our top analysts on a paper chase to track down the empirical data on whether, in fact, retention marketing is failing to positively affect bottom lines of the largest brands, and we promise to report back, whether buoyed or sunk by the results. For now, we're going to venture out on the proverbial limb by betting they do, and offer 10 maxims of Retention Marketing:
- It is less expensive to retain an existing customer than to acquire a new one.
- The general definition of retention marketing is "marketing programs focused on increasing customer engagement, creating brand affinity, and fostering loyalty to a brand, company or product."
- In the digital Age, the consumer decides.
- The social web has forever redefined how brands relate to their customers certainly during acquisition, but more so in retention.
- Know ZMOT.
- Be SMART about messaging.
- Retention Marketing does not simply mean loyalty.
- Loyalty is different from affinity, but both are types of "relationships" in the world of relationship marketing/management.
- To manage relationships you must be able to measure retention.
- In the digital age, every company needs to be Facebook.
Now, we'll undertake to say more about each of these maxims in the ensuing weeks aside from other planned content we're brewing for you.
For now, we stand by our position: pay attention to retention; its not meaningless marketing hype. If you're concerned about cutting your marketing costs, spend your dollars on keeping your existing customers and let them help you acquire new ones.