Just 49% of company executives agree that they know who their most loyal customers are, and the best way to reach out to them and get them to engage with their brand, finds Acxiom and Loyalty 360 [download page] in survey results released in March 2012. In fact, just 10% of respondents strongly agreed with the statement, while about one-third were neutral and roughly 1 in 5 disagreed. And while the vast majority (84.5%) use customer retention marketing strategies, slightly less than half believe these strategies are working.
Retention Strategies Get Low Budget Allocation
Although most respondents are using customer retention strategies, they are not devoting much of their budgets towards them. In fact, 6 in 10 respondents reported allocating 20% or less of their budgets to these strategies, while just 16% said they devote more than half of their marketing dollars. On a more encouraging note, 57.4% of respondents plan to increase their budgets for marketing retention over the next 2 years.
RFM Most Popular Metric
Data from “Making Every Interaction Count” indicates that recency, frequency, and monetary value (RFM) is the most popular metric used, at 64.1% of respondents, followed by customer lifetime value (51.1%). Roughly one-third use net promoter score and willingness to refer to gauge loyalty, while about 5% admit they do not measure customer retention at all.
4 in 10 Have No Plans to Collect Demographic Data
Although nearly all respondents said they gather basic information such as name and email address from customers, some other forms of insight are not being taken advantage of. For example, while 4 in 5 track transaction data, 14% have no plans to gather this information. And the proportion of respondents currently collecting information about household size, and income, among other demographic data, is relatively on par with the proportion who have no plans to collect this type of information (44.6% vs. 40.2%). Similarly, though about 3 in 5 either collect or plan to collect a customer’s social handle, the remaining 39% have no plans to do so.
Results from a survey released in March 2012 by Columbia University’s Center on Global Brand Leadership and the New York American Marketing Association (NYAMA) also found marketers unlikely to collect social media data. In fact, respondents to that survey appeared much less likely to collect new forms of digital data such as mobile device data (19%) and social media data (35%) than they were to collect traditional customer survey data on demographics (74%), usage (60%), and attitudes (54%).
- 7 in 10 respondents to the Acxiom survey said that less than 20% of their employees focus on customer retention strategies.
- The most common hindrances to gathering customer insight are budget limitations (52%), lack of IT support (49%), and lack of the right tools (48%).
- The most widespread customer retention strategies used by respondents are rewards programs (65.2%), social media (65.2%), and 1:1 marketing strategies (64.1%). Close to half have strategies that focus on mobile, with an additional one-third planning to focus on the channel in the near future.
- Only 35% of executives say data is centrally located with universal access across the different lines of their business.
- Companies are slightly more likely to report that they do not have a 360 degree view of their customers than they do (43.5% vs. 41.3%).
- The most important outcomes of data insight for retention marketing cited were understanding a customer’s attitude and behavior (31.5%), followed by improving the customer experience (25%), and enhancing/creating more relevant marketing message (20.7%).
About the Data: The Acxiom/Loyalty 360 results are based on a survey of 129 marketing executives with a variety of titles.