Beyond Disruption: 5 Steps To Customer Retention

Media buys you users, but product keeps them. Think about the cost of retention versus the cost of acquisition.

Almost every industry has been disrupted to some degree over the last few years. If it hasn’t happened in your vertical or you haven’t spotted it, rest assured that companies are raising millions of dollars in VC funding to make it happen. They’re coming for your customers.

Disruption often involves an upending of the traditional business model, accompanied by a superior and more personalized user experience. Accessibility to a product or service is where you want it, when you want it, and on whatever device you feel best suits.

There are many implications, but one of the most fascinating is that it is increasingly hard to hang onto your customers. In the past four years, I have left Netflix four times, Sling TV twice, and Amazon Prime once. Each decision has been made and acted upon within five minutes, with a competitor being joined or rejoined within the same period.

Indeed, brand loyalty is a huge challenge unless you have a truly differentiated experience. Patience wears thin much faster than it used to in an age of immediate access, and brand rejection is a click away. The issue will only compound itself as younger generations leave home and enter disrupted categories, with no experience of DVDs, traditional banks, or fixed line telephones.

Beyond disruption, marketing is increasingly about retention. To keep a consumer’s attention requires a constant focus on improving the experience. New ideas have to keep being injected to keep it fresh to fight the ADD, but in a world of limited resources, those ideas need to be very focused on the core product or service you’re offering your customer.

Even if you have been working in digital for years, the speed of change makes it hard even for digital veterans. If your core digital experience doesn’t keep you ahead of the competition, churn will only increase. As a result, you have to be watching the experience every second of every day.

A Five-Point Plan For CMOs

There are a huge number of data points to consider when it comes to making the right product enhancement decisions. Working through these can be hard, so here are some starters:

1. Focused objective setting: Ensure you have a clear view of what your business should be trying to achieve digitally. Does this resonate with your consumers and employees?

2. Think about marketing differently: Product development and experience creation requires a different set of skills and focus than traditional digital marketers. With the speed most industries are now evolving, identifying those skills quickly and figuring out how to integrate them into the organization is essential. There’s a reason everyone wants to get into product management.

3. “Small data” can drive a lot of faster decisions: Everyone blindly talks about big data at the moment, but all that’s needed is to identify what people are definitely doing on digital products (analytics) and speak to real users about what they think they’re doing, how they feel, and what they want (research). For most things consumer-facing, “small” data will be enough to impact outcomes.

4. Redistribute spend from media to product: Media buys you users, but product keeps them. Think about cost of retention versus cost of acquisition; otherwise you’re talking about temporary acquisition.

5. Advocacy stems from customer satisfaction and is authentic: Understand that the advocates of your services don’t need bribery, just a passion for your product, so keep them interested. Social does the rest for free.