Retentionomics
Roger and I are rather passionate when it comes to preaching the donor retention gospel.
And we’re always on the watch to see how our cousins in the corporate marketing arena come at the retention (often ‘turn’ for them) challenge.
Here’s a fascinating report — Retentionomics: The Path to Profitable Growth — prepared by relationship marketing firm Sailthru for Forbes.
One feature of this report is a comparison of the business performance of 300 marketing execs, 14% who were classed as ‘Retention Gurus’ and 14% as ‘Acquisition Athletes’ on the basis of their relative marketing focus/investment in retention versus acquisition.
Key finding:
“More Retention Gurus significantly increased market share over the last year (14%) compared to Acquisition Athletes (5%). And Retention Gurus scored better in terms of customer churn. Forty-five percent of gurus did not have increases
in churn over the last year, compared to just 33% of Acquisition Athletes. In addition, 88% of Retention Gurus are exceeding their customer acquisition goals.”
And echoing Roger’s worst fears about the nonprofit sector’s nonchalance with respect to retention:
“For most companies surveyed, the primary factor in making decisions about retaining and acquiring customers is inertia—84% of Acquisition Athletes report doing things “the way they have always been done” when defining customer strategy, compared to just 63% of Retention Gurus.”
Despite the clear rewards from customer retention:
“Seventy-nine percent of acquisition budgets increased over the last year compared to just 42% of retention budgets. Half of all Acquisition Athletes made no change to their retention budget.
And finally, what’s the biggest attitude and strategic difference between the Gurus and the Athletes?
40% of Retention Gurus consider long-term profitability growth as a factor in formulating customer strategy, while only 26% of Acquisition Athletes do so.
And for the Athletes, asked what the chief barrier was to investing more in customer retention, the top barrier was “Organisational structure does not support it”.
There’s heaps more interesting data here as to how these marketers approach the retention issue, how to measure, and what they see as the barriers — both internally and with customers — to improving retention. Definitely worth a read.
But the bottomline is:
Whether in the profit or nonprofit space, it seems retention has to fight for its place at the table, despite its demonstrable benefits.
Are you a Retention Guru or an Acquisition Athlete?
Tom
One response to “Retentionomics”
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