Power Of Retention in Driving Sustainable Business Growth

Apoorv Sood Aug 10, 2021

Imagine being a marketing wizard to have prepared the perfect potion for your retention goals. And all you had to do was to add free caffeine powder with every product you sold. Wouldn’t it be the eureka moment for getting all the addicted customers coming back for repeat purchases?

Well, your quest for retention is necessary for sustainable growth, but your caffeine in the real world is Intelligent Customer Engagement and not any potion from a witchcraft lab.

Even Redbull, for that matter, never relied on marketing its caffeinated products. Instead, it crossed every boundary of intelligent engagement strategy for sustained growth. Associating itself with extreme and high-energy sports, the brand has hammered the idea of adventure to the right audience, winning loyalists that swear by the product.

Redbull Gives You Wings has become the idea of liberation for its consumers, making the can of energy drink a lifestyle-based product. Adopting the right messaging that resonates with the consumers has become their mantra to elevate engagement and make them addicted to their powerful story-telling.

Customer Retention: What? Why? How?

Technically, customer retention means pulling back your customers in the purchase funnel constantly post their first purchase. Marketers work hard to strengthen their retention strategies for several undisputed reasons.

● The odds of converting an existing customer into a long-term loyalist is more than 60% compared to the 20% chance of acquiring a new one. (CMO by Adobe)

● The cost of acquiring a new customer stays about 40% more than retaining the old ones. (Harvard Business School)

● Loyalists are more likely to buy from you than your competitors, even at a higher price. Customers referred by brand loyalists tend to spend 50% more than non-referred customers. (Bain)

● Repeat customers tend to spend about 33% more than new customers (CMO by Adobe)

The data above is just the tip of the iceberg backing the significance of customer retention for sustainable growth. To dive deep into the immense power of retention, we need to look for innovative strategies that sustained our favorite consumer brands over the past decades.

For example, by inspecting the sustenance of an offline restaurant chain of the 1940s, we can learn how a fast-food behemoth has planted its golden arches in our hearts. McDonald's has come a long way from offering in-store happy meals to marking its digital presence and accepting online orders for home delivery.

No doubt, the consumers are loving it, as McDonald’s skyrocketed its in-app engagement by gamification of its reward platform to resonate with the new generation of reward-hungry consumers. The brand adopted personalized communication strategies to lure dormant customers and witnessed a 30% response rate compared to a mere 2% conversion on other mass-blast coupon distribution campaigns. (Campaign Asia)

In an app installation campaign accompanied by a 45-day personalized offer calendar, the brand registered a whopping 254% rise in sales revenue in 6 gulf countries during a FIFA World Cup tournament. (Think With Google)

The author is Apoorv Sood, Vice President, Global Business & Partnerships, WebEngage