Know Me or No Me: Optimizing Your Customer Retention

August 27, 2012 By Sandra Zoratti

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Our world has radically changed. As target marketers, the increasing pressure to more effectively engage and retain valuable customers in a challenging economy while communication channels are exploding makes for a daunting dilemma. As consumers, the cacophony of marketing messages has risen to a deafening level with the advent of online marketing channels—social media, mobile, email, blogs—adding to the already crowded world of direct mail, print advertising, TV and radio.

In response, consumers are voting with their dollars and their attention. Many consumers have made it clear that it's more about the message—and knowing them and speaking to them individually—than it is about the medium. The era of mass messaging with irrelevant, cookie-cutter content is clearly over. Now, consumers are taking action.

With do-not-call lists, blocked messages and do-not-track actions, it's easier than ever for consumers to shut out and ignore marketers who use irrelevant content. Many consumers are taking disengagement a step further. A recent study showed that 41 percent of consumers said they would consider ending a brand relationship because of irrelevant marketing—and 22 percent already have. In other words, consumers are saying, "know me or no me." There is no more ignoring the relevancy mantra; the consequences for marketers are dire.

Look at the stats around direct mail with static content. Paper mail is estimated at six pieces per U.S. household per day, and an incredible 44 percent goes to the landfill. Email stats are even more telling: of 200+ billion emails sent each day, 97 percent are simply ticked off as spam.

Even when marketers have deeper engagements with customers, as with loyalty clubs and rewards programs, they often miss the mark in delivering meaningful messages, according to a survey conducted by the Chief Marketing Officer (CMO) Council and Ricoh. In fact, only 6 percent of consumers thought that the promotions received through loyalty club communications were based on preferences or past purchasing behavior.

The result of this mixed bag of messages is that marketers are missing the opportunity to drive loyalty and affect purchase intentions. In this regard, 30 percent of consumers stated they are inspired to do business with a company after receiving personalized communication. As target marketers, a potential 30 percent response rate is gold, pure gold.

So what should marketers do?

First, touch your customers with information precisely tailored for them when sending must-read documents, such as statements and invoices—which are opened by 90 percent of consumers. Targeted messaging leverages data-driven customer insights for relevant, engaging messages that appeal rather than irritate. Precision marketing turns sure-to-be-read documents into a new channel of communication by cutting through promotional and direct mail noise to positively impact customer loyalty and engagement.

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