- Most brands that leverage life event data in their customer retention strategies see an increase of 10x the response rate as opposed to brands that don’t
- Life event data allows brands to personalize their customer retention strategy promoting effectiveness
- Brands should use data analytics to understand the potential positive affect that life event data could have on customer retention
2020 has been tough for many traditional brands. Large swaths of the economy shut down. People are socially distancing and staying close to home. Shopping and buying habits are rapidly evolving to suit the new environment. Online retailers have seized the opportunity with their seemingly endless product offerings and the increasing ease of transacting online. To survive in the new environment, brands need to adapt.
The key to success in the new environment is a shift from growth through acquisition at all costs to a mindset of developing lasting customer relationships.
New customer acquisition as a sole growth strategy needs to be replaced by introducing a more comprehensive and predictive customer retention strategy. I’m sure most of us have now come across the following infographic, which gives a fantastic overview of the nuances between how brands leverage channels and tactics when acquiring or retaining customers.
https://www.mycustomer.com/experience/loyalty/infographic-customer-acquisition-vs-retention-costs
Brands should be focusing more on retaining and understanding how to develop loyalty and drive share of wallet from their customers. Too often, they have not set themselves up for success in these efforts – from a data, technology, and organizational perspective. According to a poll done by Brightback, marketers cite the following three challenges to improving their customer retention strategy:
- Lack of a cohesive approach to customer retention across the organization
- Inability to automate tailored or personalized communications at the right time to consumers
- Lack of predictive methods to identify who will cancel in the future
One glaring challenge stood out from my review of Brightback’s poll – marketing was typically not at the forefront of driving the customer retention strategy; it was the customer success/customer service teams’ responsibility. To better address the three challenges identified by Brightback, retention needs to be a marketing-first approach.
Why?
- Marketing teams are more likely to have the mechanisms in place to identify and communicate to customers quickly and effectively.
- Marketing teams generally have the contacts, ability, resources, and experience to enrich customer data with third party data to improve insights.
- Marketing teams have analytical resources to build or improve customer churn models – or they know where to get external help.
One of the best types of third party data that marketers can leverage in their retention strategies is consumer life event data. When consumers move, get married, or have children, their purchase habits fundamentally change. For example, research indicates that consumers spend more than $9,000 and engage with over 70 brands when moving. As a brand marketer, understanding when your customers are experiencing that change means you can get into their inbox or mailbox before your competition – putting your brand at top of mind and allowing your brand to retain the business.
Developing a Life Event Strategy
When it comes to customer retention strategies, how can a brand marketer put this data to use?
When Speedeon engages with our clients, the first recommendation is often to conduct a histogram analysis. This analysis allows us to look at how correlated a type of life event is to when consumers churn from the brand as well as how the brand indexes overall for life event data.
Real Life Example: Speedeon ran a histogram analysis for a leading food subscription-box company and found that nearly 37% of cancellations by their highest value customer segment had moved within 2 weeks of the cancel. The client ultimately came to the conclusion that saving just 5% of their churned customers would equate to $1,500,000 in bottom-line revenue each year.
They have since ingested the new mover trigger into their customer acquisition and retention marketing strategies and the mover program has become one of their top performing programs.
Understanding these correlations will allow brands to optimize communication strategies as they will gain an understanding of how long before or after an event, the consumer churned from your brand, and allow you to personalize your messaging to retain their business. Depending on the length of time from event to churn, a brand may be able to use direct mail as a tactic, or determine that it needs to move faster and send an email. This timing component is critical to ensuring optimial retention.
There are a variety of ways to leverage life event data in marketing communication. Some brands leverage life event data in their ongoing email trigger programs – if a customer is flagged as putting their home for sale, a telecom provider might send an email to “take us with you.” Other customers use it as an opportunity to cross-sell and upsell, to remind customers of their best features, or to ensure they’re top of mind.
Check this link out for additional information on Life Event Data.
Not all life event data is created equal.
First and foremost, you’ll need to understand what life event data is most important for your brand to focus on, as some will affect your brand more than others. Additionally, when looking at third party data providers, know that not all life event data is created equal.
For example, many vendors of moving data scrape websites and compile public sources of information, then apply basic suppression and validation techniques, and then ship it out. What those providers miss, however, is applying analytics in their approach to movers. These vendors do not allow for additional demographic insights or the ability to understand if you are talking to prospects or customers. Each audience may require a different message and potentially offer, in order to convert. If you are a bank, you may want to mention complementary products (customer is moving, perhaps a loan or financial review is in order) if it is a current customer, or if it is a prospect, it may be an account opening cash bonus. These nuances in offers can help you upsell/cross-sell your products and services to your customers.
Speedeon does this better than our competitors. We pull all of these these sources together, verifying them against one another, and then cross-checking consumer databases to ensure accuracy, eliminating non-contributing false positives and allowing for additional data overlays. While this will cause a slight increase in data spend up front, it ensures quality data and allows the marketer to be much more sophisticated in their efforts. As an example, if you know it’s a loyal customer, perhaps your messaging is giving them points instead of money off.
In today’s world, where brands want to be more sophisticated in managing the customer journey, this benefit can be invaluable.
Coverage and accuracy are important, but the biggest factor in determining the success of a program, particularly in mover marketing, is timeliness. Being first in the mailbox or inbox will mean you’re top of mind, at the right time. That’s where leveraging an agency to run your life-event program can be integral to success.
For example, Speedeon monitors many large brands’ CRM’s files for changes in their customer data. We then flag these records and either get them to a mail-house or return them directly to our clients who can then send a triggered email, deploy an in-app banner ad, or phone their customer directly.
Measuring Success
Your results, your customers and your brand are different. And we can help you.
We’re happy to provide a consultation at no cost to help you build out the business case for life event data in your customer retention strategy. This includes a life event histogram analysis and ROI calculation to see if they can positively impact your bottom line.
