New research by CMO Club and Signal finds majority of CMOs are unsatisfied with retention rates but are still not doing enough
The majority of CMOs leading global brands are unsatisfied or very unsatisfied with customer retention rates, but aren’t doing enough to decrease churn and capture increased consumer wallet share, new research has found.
The study, Why Customer Identity Matters for Great Customer Experiences, released by US-based CMO Club in collaboration with marketing tech company, Signal, found 61 per cent of global marketing leaders are unhappy with customer retention rates. But only 44 per cent spend 30-50 per cent of their budgets on retention and loyalty.
After surveying 61 marketing executives, heads of marketing and CMOs, the report revealed CMOs are prioritising customer acquisition efforts despite an urgent need to engage and retain the customers they work so hard to win.
According to the head of CMO Club, Pete Krainik, it’s the pressure for growth that is pushing CMOs to focus on new customers as opposed to customer retention.
“Acquisition is seen as the drive, as the easier and sexier thing and something to share with your shareholders,” he told CMO. “But we found the companies that are really doing great things are focusing on retention and engagement.”
The report looked at global marketing leaders from major brands including Gap, MetLife, Payless ShoeSource, Princes Cruise Lines, Turner, American Express and Cirque du Soleil and found loyalty, retention and churn all weigh heavily on today’s marketing leaders across the board.
“In a highly competitive landscape, retention is more important than ever,” Payless ShoeSource’s chief customer and marketing offers, Ellen Junger, said. “Not only are loyal customers a brand’s strongest advocates, but retention drives compelling business outcomes. To increase loyalty, marketing must be as sophisticated as consumers, who shop across all channels and interact however they want, at every stage of the journey.”
Technology and organisational barriers
The research revealed CMOs realise delighting customers with positive, relationship-building experiences is about truly knowing customers across touchpoints and time. But while respondents ranked customer identity data as the most important asset for delivering a tailored experience, most respondents admitted they do not yet have the technology in place to truly harness the power of identity.
“Whether it’s engagement, retention or acquisition, harnessing customer data is increasingly important,” Krainik said. “But what’s interesting from a technology side is that there are very few truly touchpoint integrated customer platforms. And this is undermining the success of so many players right now who are growing so quickly.”
In fact, only 33 per cent have integrated disparate platforms to create holistic customer profiles. And just 25 per cent said they could combine historical data and real-time customer context across platforms. Meanwhile, only 19 per said they were able to identify the customer across all touchpoints.
“On one hand, you need to identify your customers, wherever they are,” Signal’s MD for A/NZ and South East Asia, Warren Billington, said. “But on the other hand there is a considerable challenge in being able to always being able to accurately identify across the various channels, and at scale, whether that customer is new or returning. Unless they login or somehow authenticate so you can track their behaviour, you have no way of understanding if they are an existing customer or prospect.
"But a good identity solution will be able to match behavior to that individual customer so you can better tailor and personalise a good customer experience.”
Tackling organisation barriers and CMO-CIO collaboration
Respondents also reported that organisational issues are one of the biggest challenges in tackling customer identity. Creating a customer-first mindset, aligning with the CIO, and creating internal focus groups were among the steps marketing leaders said they were taking to overcome organisational barriers.
“From my perspective, the CMOs that are truly making a difference and are the most successful are joined at the hip with the CIO,” Krainik said. “And now, you also have chief digital officers and chief customer officers thrown into the c-suite. So moving forward we need to ask who should take ownership of the data and the insights?”
For CMOs to be effective, they need to be able to engage with their customers from both an acquisition and retention perspective, which means having the right organisational foundation, Billington added.
“In the report, we talked a lot about organisational silos and the need to shift the paradigm to make your customer data more available,” he said. “But for a lot of years, there has been spend in digital media, when in fact marketers really need to focus on better leveraging technology to connect and understand their customer data.”
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