Retention Marketing

Retention Marketing

 

Last week, I had a chance to know about “retention marketing” in my work. “Retention marketing” could be a part of digital marketing. “Retention marketing”, which is a method to maintain a profitable relationship with the existing customers, began to attract attention. The biggest reason is that it is more efficient to strengthen the relationship with existing customers and more likely to lead to sales than developing new customers. Therefore, retention marketing can dramatically reduce marketing costs.

I work for a life insurance industry, which needs solid “retention” because life insurance products are usually super-long time horizon service. However, ironically, life insurers often have hard time to try to keep in touch with their existing customers because insures sometimes do not have a chance to communicate with customers until they died…

A couple of takeaways I got in the small study include;

 

l  "Retention" does not attract companies’ attention enough as "acquisition of new customers". One survey points out that the percentage of enterprises that focus on "acquiring new customers" is 44% while the percentage of enterprises focusing on "retention" is just 18%.

l  But we should know the fact that the cost of acquiring new customers is five times the cost of maintaining existing customers (There are various research about this figure such as 6-7 times, 5-10 times or even 30 times).

l  We should also know that the 5% increase in retention rate brings a profit increase by 25% to 95% depending on the industry.

l  Finally, one survey shows that the most effective digital marketing method for "retention marketing" includes e-mail (56%), social media marketing (37%), content marketing (32%), word-of-mouth marketing (26%). All of these are more or less personalized.