David Reed’s article on loyalty (MW last week) included the alarming and I’m not sure entirely accurate quote that clients are dividing marketing departments between acquisition, which uses advertising, and sales promotion and retention, which uses direct marketing.
This simplistic division of roles and the channels required to fulfil them misses the vital point that the most effective communication both acquires and retains at the same time.
For example, the O2 television campaign offering improved value for loyal users to reduce churn also attracts non-users by portraying a network that looks after its customers. And the AOL Discuss campaign clearly reaches out to consumers beyond its traditional base while reassuring its increasingly tech-comfortable customers that they are with the best ISP provider.
On the flip-side of this direct mail could be seen simply as retention activity. Again, however, this definition misses the main opportunity – that in many sectors current customer advocacy is the single most important acquisition vehicle. Rather than desperately hanging on to customers, the content of this communication needs to give reasons (and not just member-get-member schemes) to recommend the brand.
While the division of retention and acquisition sits neatly on a spreadsheet, simply dividing the two tasks will result in lower returns from communication and the type of commoditised market described in reference to the insurance sector. Integrated thinking across the two is the only way to address this type of downward profit spiral in the longer term.
Ollie Joyce Partner Rise Communications London SE1