From acquisition to retention and back again—it’s all about the data
To maximize customer LTV, build your retention efforts off of your acquisition data—and don’t wait to start
Customer acquisition and retention are often thought of as two separate operations, but they have one common goal: securing customer lifetime value.
Too often, we find that the acquisition and retention teams are in completely different worlds. They’re so siloed that the other team might as well not even exist as far as their efforts are concerned.
This couldn’t be worse for retention—and it’s a waste of acquisition resources.
Retention is the method by which we justify the high cost of acquisition. Plenty of marketers understand this and understand that retention is critical, but the way they’re approaching retention often ignores how acquisition took place, which in turn makes retention efforts less effective.
Acquisition efforts are mostly based on aggregated data. You’re targeting a specific segment of potential customers, but you don’t have much individual data on each potential customer in that segment.
When you acquire a customer, you suddenly have a lot of personalized data on that person. You’ll know, at the very least, what they purchased and what the value of that purchase was, but you’ll often have some demographic, psychographic, and behavior data as well.
But on top of all this, you also know something about what appeals to that customer. You can look at the acquisition campaign(s) to see exactly what kind of marketing efforts appealed to your customer and pushed them across the gap.
That data is valuable—and the retention team needs it to do their jobs more effectively.
Using data for more personalized retention efforts
The trick to all this is to create a seamless experience from acquisition to retention by using that all that acquisition data to personalize retention campaigns.
For example, if the customer was acquired by conservative, static campaigns, the characteristics of those campaigns need to now appear in your retention efforts. If it young, dynamic campaigns were what appealed to your new customer, and moved them to action, your individualized retention efforts need to have that same look and feel.
What we’re really trying to do here is to create a truly personalized relationship with the customer from day one. The more personalized the relationship is, the more accurately we appeal (in our retention efforts) to this new customer in the way they have already shown us they like to be appealed to through, we’re going to be more successful retaining that customer and increasing the value of that customer over their lifetime.
This might sound like it’s simple and straightforward, but if your data is fragmented and your acquisition and retention teams aren’t sharing data (or even talking to each other), you’ll end up less effective retention campaigns.
You need continuity of data. You need your teams to be sharing data immediately so that you have a seamless flow between acquisition and retention. Retention teams need to know everything they possibly can about this new customer so that they can start their job right away.
Start retaining immediately
Too often, businesses put retention on the backburner and only think about new business. This is foolish for a variety of reasons, especially from a financial perspective (depending on who you ask, acquisition can cost from 3 to 30 times as much as retention), but even worse is when retention efforts are deliberately delayed.
I understand where this impulse comes from. Many businesses are under the impression that they’re going to “bother” their customers if they start retention efforts too early. They’re worried they’ll make their customers angry and end up ruining the relationship.
I’ll admit that this is certainly possible, but the average customer of today is much different than the average customer even ten years ago. Expectations for responsiveness in businesses has skyrocketed.
When the average customer expects to get an answer to a question over social media in just a few minutes, when they expect someone to be available to speak to them at all hours, you’ll be hard-pressed to annoy them with your comparatively mild retention efforts.
Rather than waiting days or weeks (or longer) to start retain, you should start right away. I think the word “retain” itself is a bit misleading. This is more about building a relationship with your customer.
If you meet someone on a dating app and then disappear for a week, do you think they’re still going to want to talk to you? For most people, the answer is no. The modern customer wants to see that you are ready to work with them and build that relationship right away, from the moment of purchase.
This is a critical moment because first impressions matter. The more you can show your customer that you understand them and can cater to their personality and tastes, the more likely that relationship is to get off on the right foot and become long-term.
That’s what your acquisition data is so critical. It’s effectively the only real information you have on what this customer might actually want and need from you. It’s a guide to making a good first impression and ensuring that you get that second date.
Once you get over that initial hump, you’ll be able to strengthen the relationship over time as more and more data becomes available. Retention can then send data back over to acquisition, helping them to acquire existing customers for other areas of business.
When data is shared, the entire company benefits.