The Keys to Customer Retention

Here are some interesting statistics on customer retention from 2021:

• Retention Boosts Profits: A 5% increase in customer retention can boost profits by 25% to 95%. (Hubspot)
• Customer Experience Matters: 34% of customers will NEVER buy from a brand if they have had just one unpleasant experience with that brand. (Oracle)
• Personalization Matters: 33% of customers will leave if the brand lacks personalization. (Nextiva)
• Knowing Your Customer Pays: 91% of customers are more likely to purchase from brands that provide them with meaningful and relevant offers. (Forbes)

Yes, customer retention matters and if you can help your clients improve retention rates, you will be the hero. But what are the keys to improving customer retention?

The State of MarTech report, by the research firm Ascend2, uncovered some interesting data on customer retention and areas that marketers have identified to improve retention.

The study found that 22% of marketers identified retaining customers as the greatest challenge to their overall digital marketing strategy.

What are the keys to improving customer retention and increasing profits?

Know your customer: The more data (demographic, firmographic, and behavioral) that you have about your customers, the better you can identify and meet their needs. But having the data is not enough, it must be a single, centralized view of the customer. With a centralized view, you can act on the data you have available. Unfortunately, marketers don’t have the tools to achieve a centralized view. In fact, the average ranking is 6 out of 10 – a failing grade!

Personalize the experience for your customer. Customers want 1-1 experience, and personalized experience improves retention rates. A recent Ascend2 study found that 95% of marketers say yes, personalization significantly improves campaign performance. Marketers recognize the importance of delivering a personalized experience as a “must-have” to engage and retain customers.

The Solution to Improving Retention: Consolidate and integrate tools and technologies

Improve the customer experience and you will improve retention rates. The foundation of an improved customer experience is consolidated and centralized data. The State of Martech research study found that 83% of marketing professionals agree that consolidating tools in their marketing and sales would increase productivity and efficiency.

Consolidating tools in our marketing and sales tech stacks would increase productivity and efficiency.

Source: The State of Martech. Conducted by Ascend2.  Published August 2021. N = 187 U.S. marketing professionals. Download the report and clip this chart.

Running with a lean technology stack can reduce data silos and enable better end-to-end visibility of prospects and customers and as a result, you can deliver a 1-1 customer experience and improve retention rates. Consolidating tools can also decrease the time it takes to solve issues, significantly reduce costs, simplify forecasts and tracking KPIs, and streamline the training of staff members. 

Research shows that the #1 way to manage customer data is by using a customer relationship management (CRM) system. A robust CRM improves customer relationships in the following ways:

• Better knowledge of customers: See above discussion on firmographic, demographic, and behavioral data.
• Better segmentation and personalization: Segment contacts for specific target audiences to customize the customer experience.
• Better customer retention: Optimize communication to improve customer satisfaction.
• Better and speedier communication: Automate and customize workflows to improve conversion.
• Better lead management: Use a Life of the Lead approach for a visual representation of which campaigns, touchpoints, and activities attribute to each sale.

Learn more, download the 18-page research report, The State of MarTech. Coverage and analysis of this research are also available by MarketingProfs, MediaPost, and Convince & Convert.

More Information About the Research

For this report, Ascend2 surveyed 187 marketing professionals in the U.S., using multiple third-party survey panels, and the survey was fielded in July 2021. The research was commissioned by SharpSpring to provide marketing professionals with data-driven guidance on how to take back control of their marketing tools and data to pave the way to better results. Download the report, clip the charts for client presentations, and adapt it to support your marketing efforts.

Learn more, download the 18-page research report, The State of MarTech. Coverage and analysis of this research are also available by MarketingProfs, MediaPost, and Convince & Convert.