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  • Writer's pictureAnnie Ianko

Customer Retention, Loyalty and Advocacy: The Pillars of a Marketing Campaign

Does your marketing strategy aim to acquire new customers?

Of course it does.

Does your strategy pay an equal amount of attention to retaining the customers you already have?

It should. Existing customer are the pillars of a successful marketing campaign. Your business depends upon keeping them, developing their loyalty and turning these customers into advocates.

You may want to spend more attention to existing customers after reading this article.

Customer Retention

Acquiring new customers is expensive. The time and effort it takes to acquire a new customer is drastically higher than time and effort spent retaining existing customers. It can also be up to 25 times more expensive.

Studies show that organizations that improve customer retention by just 5% typically see profits surge anywhere from 25% to 95%.

To improve customer retention, you must be able to measure it. Do you know your customer retention rate?

To calculate customer retention rate (CRR):

  1. Choose a time period you’d like to measure – year, quarter, or month.

  2. Determine the number of customers who are interactive with your brand and have purchased from you at the beginning of the period and then again at the end of the period.

It’s important to know your CCR because now you are able to dig into data about lost customers to understand which customers left and uncover reasons for leaving. Even more important to see are the trends within those customers and reasons for leaving.

Next, evaluate the sales process and identify opportunities to add additional qualifying questions to the process and revise the way you understand buyer persona.

In doing this, you also extract insights about the attributes of your most loyal customers.

Customer Loyalty

Encouraging customer loyalty is different from customer retention.

Once you’ve retained a customer, the goal is to make them a loyal customer. Loyal customers make repeat purchases. And what’s even better – loyal customers help sell your brand for you. No charge.

Loyalty measures customer satisfaction throughout the brand experience and the likelihood that customers will share that experience.

When we measure customer loyalty, we first seek to understand how customer satisfaction relates to repeat sales.

It’s not as simple as it sounds. Many underlying factors must be considered in order to see the complete landscape of why customers are satisfied.

Are customers making repeat purchases because they are really happy with the brand and the experience?

Or are they making repeat purchases because:

  1. the nature of your product has a short expiration date;

  2. your product needs replacing because it doesn’t work all the time;

  3. or a more effective brand isn’t available – yet?

Loyal customers should have a line on your balance sheet because they are your organization’s most valuable asset.

Your marketing plan should include customized campaigns targeted specifically at developing and maintaining customer loyalty. Loyal customers present opportunities to upsell and cross-sell. Not only do they buy from you regularly, loyal customers become a marketing channel for your brand by becoming advocates.

Customer Advocacy

Sales processes are becoming more customer-centric each day. Customers are becoming brand advocates as a result.

An important question for marketing departments to answer is:

What motivates a customer to become an active advocate and spokesperson for your brand?

There are business reasons your organization develops customer advocacy strategies and there are customer-centric reasons to develop advocacy strategies. The only way to create real customer advocacy is to focus on the customer-centric motivators. This might seem obvious but too many companies get this all wrong.

You must cultivate interactions in your customer advocacy strategy that drive value for customers. Think of advocacy the same way you think of purchasing. The customer must get more out of the experience than they put in.

Intrinsic motivation is essential. To motivate someone intrinsically, you must know them. Customers are intrinsically motivated in different ways. Cash is usually a pretty safe bet, but some customers may be more motivated by a thank you letter or helpful blog content.

Consider adding these strategies to your advocacy campaigns:

  1. Collect data on high potential advocates through surveys and the like

  2. Let that data guide each customer’s advocacy journey

  3. Conduct tests to determine efficacy of the program

  4. Collect more data and keep this loop running

To understand customer personalities and how those personalities drive engagement with your brand, this process must be ongoing.

Customer advocacy is the marketing plan of the future and companies that begin seriously incorporating advocacy into their marketing strategies will come out ahead.


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