Building the case for Return-on-Relationship

In the retain stage of our simplified customer lifecycle, marketing focus shifts to the relationship. Customers entering this third stage have transitioned through development, where the primary focus was on driving behaviors associated with maximizing revenue and profitability. Now it’s time to evolve beyond a strictly transactional relationship and develop the emotional connection that yields brand preference and, ultimately, true loyalty as opposed to mercenary loyalty (paying for loyalty with pricing strategies and tactics like discounts). This requires measuring return-on-relationship (ROR) in addition to return-on-investment (ROI). The goal here is to create an optimized and balanced win/win relationship.

Customer Retention Behaviors

Behaviors in the retention stage differ significantly from those in the development stage. In the develop stage – which focuses on purchase continuity, onboarding and growth – there are more behaviors and a greater variety of behavior types. Notably, the behaviors tend to be quantifiable and measurable, often tied to a specific key performance indicator (KPI) and ROI goal.

In the retention stage, most of the behaviors are “soft,” engagement-related behaviors. As a result, measurement becomes more subjective, focusing on things like customer satisfaction, brand preference and intent-to-refer. What’s important here is quality over quantity. That being said, the crucial purchase-related behaviors established in the develop phase must continue to be reinforced and measured in the retain phase. As a result, positive or negative fluctuations in development behavior metrics are often attributable to specific retention marketing tactics. It is important to point out that driving retention stage behaviors is especially vital for brands with fewer purchase or service-related behaviors (e.g., lower frequency, higher ticket). Retention behaviors fall under three categories: