Brands that increased their spend on customer retention over the last three years created a 200% higher chance of growing market share, according to a new study from Forbes and Sailthru.
The study, which drew from the insight of 300 global CEOs and media and retail executives, also found that the best performing brands are ones that connect acquisition and retention.
And brands focused on customer retention are nearly 50% more likely to consider projected long-term profitability growth when making decisions about customer strategy, with management teams twice as likely to understand the impact of customer lifetime value on revenue and growth.
Of the polled organisations that stated they had failed to retain customer loyalty, 51% said it was due to a lack of memorable marketing, while 40% said they didn’t currently offer a seamless omni-channel shopping experience.
Meanwhile, only 15% of the polled companies admitted they were able to tie the calculation of customer lifetime value to revenue and growth.
Responding to the report’s findings, Richard Cristofoli, marketing director at Debenhams, insisted customer retention must be every marketer’s priority.
He said: “We are absolutely able to define the attributes of a valuable customer. We build a profile that includes a customer’s transactional history and marketing engagement.
“We are starting to look at how we can overlay more attitudinal insights on this, so we have a very rounded view of valuable customers’ attributes.”
And Nathan Ansell, global director of loyalty, customer insights and analytics at Marks and Spencer, added: “Our budget is all about retention, though we don’t necessarily use the word retention. Really it’s frequency—we focus on encouraging those who shop less often to shop more often and across categories.”
A recent KPMG Nunwood research suggested the UK is currently ‘four years behind the US’ when it comes to customer experience.