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 purchaserelated 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:
Cultivation focuses on driving engagement-related behaviors that nurture, expand and deepen the customer relationship that was initiated in the first two stages of the lifecycle. Specific examples include:
Recognition centers on celebrating and rewarding customer milestone achievement. In many cases, customers are aware of the milestones through formal hierarchical program structures such as tiers or levels that drive increased engagement and target behaviors. Incorporating tiered rewards and incentives like VIP perks, enhanced customer service and exclusive content can be a powerful driver of preference and loyalty. But a “surprise and delight” approach can also be highly effective in deepening the relationship, as either the core strategy or as an overlay. Additionally, incorporating tiered rewards and incentives like VIP perks, enhanced customer service and exclusive content, can be a powerful driver of preference and loyalty. Extension concentrates on increasing the duration of customer relationships. Potential KPIs include retention rate, attrition rate, time-as-customer and lifetime value. In some cases, there is a formal process for extension tied to a specific behavior such as a contract or subscription renewal. In most cases, however, extending the relationship is an integral component of your ongoing lifecycle marketing program that incorporates a number of different behaviors. As a foundation, the key purchase-related behaviors that were established in the develop stage are reinforced and optimized in this stage. Optimization includes soliciting feedback regarding preferences and adjusting the relationship accordingly to give customers a sense of control and create that win/win balance.
Targeting is central to optimizing the effectiveness and efficiency of loyalty marketing programs. It is especially essential for driving retention stage behaviors, developing customer relationships and nurturing the emotional side of loyalty. Targeted marketing can take many forms including audience smart or personalized content, communications, promotions, offers, program rule structures, rewards and tiers or levels. Targeted content can be delivered to different customer segments based on similar characteristics. It can also be delivered at the customer level, triggered by individual behaviors or behavior patterns. Database marketing disciplines – profiling, segmentation, predictive modeling and program analytics – are the foundation for targeting. And, because data is at the core of database marketing, successful targeting depends on capturing customer data early in the lifecycle and building out your customer knowledge base as the lifecycle progresses. Relevant sources include: transactional and BUILDING THE CASE FOR RETURN-ON-RELATIONSHIP The Power of Targeting For Retentionbehavioral data; program activity; profile information (e.g. demographics, psychographics, firmographics); and self-reported information regarding attitudes, perceptions and preferences. The following are best practices to follow when designing your program:
Capture communication preferences to give customers some degree of control. The retain stage, with its focus on relationship development, is critical to customer lifecycle progression and optimization. Success in this stage creates that emotional connection essential to true loyalty and builds a strong foundation for affinity and advocacy.
Submitting your information allows us to reach out to you in the future.