It took time to understand which marketing programs produced the best results in the past. This is not the case today. Marketing departments are drowning in data.
However, the key to showing ROI through Marketing is to use the most up-to-date tools, like marketing automation and all of the data available to modern marketers to make the right business decisions.
Marketing has one goal: to keep customers. This is one of my favorite marketing quotes. While most marketing efforts focus on acquiring new customers, it is often much more profitable to focus on maintaining existing customers.
Marketing automation tools give marketers the data and insights they need to understand how to retain customers, get more of the correct type of customers, and market to achieve the results executives want.
Marketing objective: Customer retention is vital
Marketing programs often have three main goals: Brand Awareness, Engagement, and Conversion.
However, there is another objective that is often overlooked: Customer retention. This is even though acquiring new customers is 5 to 25 times more costly than keeping an existing customer.
Customer retention is therefore so necessary. This is logical when you consider that retaining a paying customer can be easier than finding, convincing, and converting new customers.
Bain & Company’s research revealed that acquiring a customer is six to seven times cheaper than retaining an existing one. Increase customer retention rates by 5% to increase profits by 25% to 95%
It is vital to keep the right customers. It could be the best way for marketing to show its value to the C-suite.
What is customer retention?
Customer retention is the percentage of customers that continue to use your product over time. Other companies use churn rates to measure retention—the percentage of customers who leave within a specific time frame.
Most companies consider this annually, but it might be necessary for companies that invoice monthly.
Investors use retention and churn rates to assess the firm’s underlying health. Investors are more likely to question the viability of a company if the churn rate is higher (i.e., if more customers choose to leave after signing up).
Customer loyalty and retention are so crucial for measuring marketing’s overall value.
Companies at the top of their game use customer retention to ensure they acquire the right customers, predict the return on marketing, and drive sales and financial forecasting.
