Maxims of Retention Marketing

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:

  1. It is less expensive to retain an existing customer than to acquire a new one.
  2. 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."
  3. In the digital Age, the consumer decides.
  4. The social web has forever redefined how brands relate to their customers certainly during acquisition, but more so in retention.
  5. Know ZMOT.
  6. Be SMART about messaging.
  7. Retention Marketing does not simply mean loyalty.
  8. Loyalty is different from affinity, but both are types of "relationships" in the world of relationship marketing/management.
  9. To manage relationships you must be able to measure retention.
  10. 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.

It's Easy to be Scared; That's Exactly What "They" Want

In an orthogonal departure from our occasional stream of relevant content here, or at least a tangential departure, we want to briefly comment on the senseless and tragic event that marred one of the most historical mass participation events in the country yesterday, the Boston Marathon.

(And incidentally, we promise to pick up the frequency and hopefully quality of posting here shortly.)

"Orthogonal" to the extent this has nothing to do with how business connects with its clients and customers.  "Tangential" to the extent this actually might have a connection if we think about the wholesale collapse of what should have been a wonderful day of celebration and well, yes consumption, but most importantly: What that might mean for the next massive marathon, like this Fall in New York City.

Look at the headlines and column feet of commentary -- for instance today's edition of USA Today declares: "TERROR RETURNS" and "That Post 9/11 Quiet? Its Over."  And we don't mean to single out USA Today; heck, it was the entire newstand regardless of publication.  Sadly, it sells papers and persists the awful truth that we're a voyeur nation.  But here's another take: our's with an all caps "FWIW" meaning "For Whatever It's Worth."

Its easy to be scared.  As the details of this tragedy unfold its easy for us to demand our government do something, anything to make it go away.  It would be easy, but wrong.  Doing so plays right into the hands of the criminals responsible for this.  And it simply glorifies and illuminates whatever crazed cause they may have.  We say "they" because we bet it was more than a lone actor, but that's totally beside the point.

You see, terrorism feeds on fear -- fear to go out, to be a part of massive crowds, or be found in large public places -- whether its the Boston Marathon or the first shopping day of the holday season.  And its designed to scare us well beyond the scope of what actually happened.  And that (what happened), we believe is actually more rare than our senses suggest.  Give credit to the nation's law enforcement and security experts for their vigilance following 9/11 to lock down on terrorist opportunities.  But recall the gloomy predictions that we would see chaos every few months afterward?  It didn't happen because by refusing to succumb to terror and being vigilant but carrying on, we better managed our destiny.  And avoiding the reality disotrtion field these rare events cause is imperative.

There has been a bunch of research on fear and the brain teaches us to exaggerate threats, especially ones that are rare, immediate, with shock and awe, and in the end random.  The media feeds it, and we ingest it. Terrorism pushes all of our fear buttons, very hard, and we overreact rather than respond. 

The simple truth is there is no fool-proof way to stop these senseless acts of terror -- whether domestic or foreign.  They will continue and so must we.  But we must not assume that at every corner chaos awaits.  Remain vigilant yes, but remain calm and carry on.

Remember, although it is easy to compromise the securtity of uncontrolled areas, terrorism experts will also tell you it takes an enormous amount of coordination, resource management, and precise execution of a plot.  Hollywood has made it spectacular (and deceptively simple) to blow things up.  In the real world it is really much harder to do; hard to bring together the materials, hard to get the coordination, and hard to make a workable plan go off like clockwork.  The result?  Yes, every so often there will be an unusual event where things come together and a tragic strike occurs.  But its rare, and we always adapt and adopt to the circumstances (even if it now means pulling our shoes off in airport security lines and body scans at nearly every public office entry).

We all should be angry; really upset.  For good reason.  But we should refuse to be terrorized.  And honestly, we think we'd all be better off if somehow the Media could contain themselves and refuse to sensationalize this.  Otherwise, we're playing right into the real plot of terrorism: to strike a disproportionate amount of fear, altering our behavior, and scuttling our daily lives.  Don't succumb to this. 

Sure, its hard to keep this perspective.  But how "successful" this attack is depends more on how we react in the next few months than the tragic and horrific scenes in Boston yesterday.  When we (over)react by changing laws, policies, or procedures that ultimately make our great nation less open, reducing our freedoms, and constraining our ability to flourish, then terrorism succeeds, even if the attacks fail.  If, on the other hand, we refuse to be terrorized, then terrorism tends to fail even if an attack is somehow a "success."

Like many of you, we have friends and family in Boston, our founding partner is originally a Bostonian, and we know many who went there to celebrate their achievement of being able to run 26 miles, 384 yards.  And as we (at C[IQ]) watch this unfold in the papers, on the 24-hours news cycle of cable, in the echo chamber that is the Internet, and at our airports' security checks (for some of us this morning) we feel compelled to remind our readers to refuse to be terrorized, because although its easy to be scared, that's exactly what "they" want.

We now return you to our regularly intended content.

Dear Monday

We know its Tuesday.  But Monday was one of "those" days.  You know, the kind of Mondays that Moma Cass (The Momas and the Papas) used to sing about.  Geesh, each of us here had grand plans to accomplish but sometimes it all just crashes and burns... including plans for more postings on our CRM definition discussion.

So, we can't recall who sent this to us, but it seemed like a perfect way to sum up our feeling about yesterday's "Monday meltdown" :

Comment

Gregory Miller, CTO

Greg has been in the tech sector as a software architect and engineer, product manager, marketing and biz dev exec., and even IP and privacy lawyer for 3 decades. He is currently on the Board of a non-profit tech foundation reinventing America's election technology, is a venture adviser in the Silicon Valley, and serves as the CTO for C[IQ] Strategies, Inc.