Updated blog on December 18, 2019.
Coke vs Pepsi. Red Sox vs Yankees. Kirk vs Picard. iPhone vs Android. These mark some of the great rivalries of our time, and can always be counted on to spark a lively debate. Marketers, also, often face choices that can put them on one side or another of a hot button issue. Customer acquisition (obtaining new customers) versus retention (retaining and growing current customers) is one of these frequently debated topics.
Marketing teams often face a similar choice. Focusing on customer acquisition (attracting net new customers) versus customer retention (retaining as many current customers as possible). This challenge lands them squarely in the middle of an ongoing rivalry and a frequently and hotly debated topic.
In an ideal world, companies run both ABM acquisition and ABM retention programs because one feeds the other. Without acquisition, no new customers. Without retention, your cost of customer acquisition skyrockets and your customer lifetime value plunges.
The path to success relies heavily on the business's ability to steadily increase revenue and profits through a well defined strategy that includes a healthy ABM mix of both acquisition and retention programs.
Despite the importance of retention, studies and statistics show a clear preference for acquisition among businesses. Reports show that 44% of companies are focusing more heavily on customer acquisition as opposed to the mere 18% that are concentrating more heavily on retention. This is interesting because studies also show that it’s far more expensive to acquire new customers than it is to retain existing ones. Most industry experts peg acquisition costs at about 6-7x that of retention.
So why do marketers find it so difficult to focus on both retention and acquisition strategies simultaneously? It’s all about the data!
Acquisition and retention strategies require different data sets. And, they employ different ways of using that data. If marketers are challenged with a lack of accurate data to begin with, how can they successfully run simultaneous strategies with two very different sets of data. This is what ultimately leads to focusing on one strategy.
So, what does it take to be successful in both acquisition and retention strategies from a data perspective?
Acquisition: We already know that attracting new customers is a challenge. You have to breakthrough the noise and really know your customer. You have to engage them and that can be very costly. To successfully market to your ideal customers you need accurate, comprehensive data that creates a profile of your contact for you. In order to accomplish that, you need to enrich the data you have - meaning, fill in the blanks. You will also need to identify new contacts within your targeted accounts to expand your target audience. Here’s where Zylotech can help. We provide two easy to use services, Zylotech Enrich & Discover. Enrich enables you to deliver missing information you need to complete your lead and contact profiles. Enrich also corrects inaccurate data within lead and contact files. Discover gives you new contacts within your target accounts so that you can expand your database of ideal profile contacts - great for marketing effectiveness and awesome for Account Based Marketing (ABM) programs.
Access to this type of data means you get to the right people, with the best message, at the ideal time. Something every marketer dreams of doing.
Retention: As mentioned earlier, it’s far less expensive to retain customers than replace them, so customer retention programs are critical. The first step to leveraging existing customer data is to ensure the existing data is up to date. Customer data changes and “decays” constantly. Again, Zylotech can help overcome this hurdle. Enrich continuously appends customer data to find the most up to date addresses, email, job titles, contact information and more. This way you don’t waste cycles updating your database records and searching for the right contact information. In addition, you can use Zylotech Discover to find new contacts within your customer accounts. It’s ideally suited for “land and expand” strategies that are proven to increase customer retention. Discover also allows you to find “look alike prospects.” Contacts that have profiles similar to those already in your customer account lists.
The acquisition versus retention challenge will, no doubtedly, continue to haunt marketers. However, in order to succeed, they need to accomplish both for businesses profitability. Zylotech can help eliminate the data challenge and pave the way for success in both camps.
Pat O'Brien is the Chief Revenue Officer, and winner of the “Most Likely to Survive a Zombie Apocalypse” at the Zylotech Summer Superlatives...why we think it's his 4WD Jeep. When Pat's not working with the Sales and Marketing teams you can find him walking Concord's historic Battle Road Trail or taking his therapy dog Harrison to local retirement communities.