The new customer marketing lifecycle in the Engagement Economy
Columnist Chandar Pattabhiram discusses the important of customer retention in an age where switching costs to consumers are low.
In my last post, I expanded on the concept of the “Engagement Economy,” today’s world where everything and everyone is connected. This world presents a new playing field for marketers trying to engage people within their organization, as well as partners and customers.
I frequently cite the statistic that only 13 percent of marketing leaders are working to retain and grow customer relationships through improved customer experiences. But in the Engagement Economy, keeping a customer becomes more important than acquiring them.
This is because the Engagement Economy is rife with business models where customer switching costs are low. Think of ride-sharing apps: Lyft and Uber must constantly compete for attention and brand affinity, as users can switch between them with virtually no headaches.
Although it’s on a larger scale, the same paradigm applies to the B2B world, where an organization can switch out Cloud-based applications with minimal long-term commitment.
So, what can you do? Smart brands must understand that in order to compete in the Engagement Economy, they must rethink their approach to engaging with their customers. This begins with getting rid of the phrase “retention marketing.” It’s a complete misnomer. Instead, think of retention as an outcome of smart marketing across the entire customer life cycle.
Getting to this outcome starts with acquisition — the kind of outreach that a majority of marketers are already comfortable with — but from there encompasses adoption, cross-sell and advocacy. Marketing leaders must allocate people and program dollars to each of these stages in order to execute them effectively.
Let’s take a closer look.
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