Retention Is The New Acquisition Strategy

The market is forcing marketers to address more complex questions than most have the bandwidth, resources and budgets to address. There's a lot of talk about retention marketing these days. In down times many organizations constrict, focusing on retaining customers, maximizing profits and controlling expenses. In good times, companies tend to think about new acquisition options, testing new channels and expanding reach in the marketplace. Two years ago the major goal of most companies we talked to was growing their consumer/b2b database. Today, it's about making money with what you have.

If we are in a constricting market, with the dollar not stretching as far as it has in the past, consumer confidence not as high and new "free" channels emerging to challenge the inbox, what do the small email teams do to make an impact in their companies? I think our Email Insiders are on the right track based on the topics of recent columns: strategy, focus on the database, understanding what metrics truly impact your business and where to place your strategic investments. These topics speak to the basics of what makes email marketing successful; I'll add to them with a few key "recession" nuggets you can pose at your new team meeting.



The dormant customer: Do you really know who is dormant? This could be a subscriber, an actual customer who hasn't purchased in some time, or one who has limited engagement with you through email. In either case, your goal is to find creative ways to engage the "dormant" and understand the channel dynamics of customers that are disengaged with email.

I have several clients that have significant portions of their database (>50%) that are classified as "dormant" (haven't purchased in 18 months and in some instances is defined by recency of response). I'm not a big proponent of purging this portion of your database to artificially inflate your response rates, but size doesn't always mean the most in recessionary times. Reach, defined as your ability to reach a defined market within a given period of time, is less important if the cost to manage this overshadows the effort. My best advice to businesses grappling with the dormant customer is to squeeze the orange as much as you can during these times (either commit to aggressively catering to this audience, or focus your attention on the other 50% of your database; a half-hearted effort won't win in today's market).

Mine the conversion point: Are they really dormant customers or is there a channel shift in place? Are they converting through search, media and you aren't getting credit as the "last click"? Most companies that I talk to are poorly set up to assign attribution to the email channel, which prohibits it from gaining clear insight into the impact email has on a customer event.

Some things you should consider when taking this on: email is very difficult to assign attribution to in a traditional attribution model since it influences so many portions of the conversion cycle. You should do this study with email subscribers, but exclude email in the attribution model, so you can determine what other channels are influencing purchase and then optimize email to support the channel influences. If your customers who have been purchasing through email, now are converting through media and search, this doesn't mean email isn't effective, it means it just got more expensive to complete the sale. Land on the landing page. One of the most challenging things to address is not what subject line works, what creative pulls, or what content is most relevant, it is understanding the exchange between your site, interstitial pages and the email. Email is outbound, the others are passive experiences that are dependent on some channel to get the consumer into those experiences. You should continually be testing how much content to put in email, how much to support on the landing page, whether the site (in its present form) supports the user experience you want to drive.

While heuristics will outline the tasks you want to enable and your site is designed around that, it also assumes a particular entry point and context. The landing page from a search term isn't necessarily appropriate for a consumer who received a personalized email. I always say that email can make up for a badly designed site, since we can direct customers, based on interest, to particular portions of the site rather than relying on the home page to help the consumer navigate. Landing Page testing, post-click path analysis will be critical to assess key site dependencies you have and the correlation to conversion, the types of pages consumed, the time spent relative the timing of the email, repeat visits post-click. All are critical drivers of behavioral insight. We've shown in many cases this type of targeting can increase conversion by 30% to 40%.

Our industry has made great progress over the past 10 years, the technology has come a long way, our view of optimization is on another level, but we are still fighting the send-and-analyze mentality that drove direct marketers crazy. We must understand there are many keys to optimizing a database and understanding the dependencies our channels have, and they begins with the owners of the email database, who have a keen insight into the customer, reaching outside our channel to understand the channel dynamics and patterns of our customers. Our view of acquisition has evolved, as will our view of retention marketing, all of which will change our operations in the coming years.

5 comments about "Retention Is The New Acquisition Strategy".
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  1. Mark Hughes from C3 Metrics, June 1, 2009 at 11:24 a.m.

    Very easy to assign revenue attribution of email& need to leave it out of the equation.

    Full White Paper available to download from C3 Metrics home page here:

  2. Mark Klein from Loyalty Builders LLC, June 1, 2009 at 11:33 a.m.

    David, see my blog post with the same title from last September at

  3. Lana Mcgilvray from Datran Media, June 1, 2009 at 11:33 a.m.

    David, as always, smart piece. I'll be sharing it with our clients and partners.

  4. vedinteractive ., June 1, 2009 at 12:49 p.m.

    Exactly, we need to attribute ROI to the entire process rather than at the point of purchase. Great article.

  5. brian o'connell, September 17, 2009 at 8:34 a.m.

    the stated aim of any business is to acquire, develop and retain customers. The retention part gets most lip service as the metrics around acquisition and development are easier to prove.

    All marketeers need to get closer to customers, developing more 1:1 personalized communication, basic email blasts won't work.

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