Balancing Engagement and Acquisition in Marketing

Josh GordonFor years online retailers have had the pedal to the metal regarding customer acquisition strategies. While attracting new customers is still a primary goal for online retailers, for the first time in several years the balance between customer retention and acquisition is tipped in favor of retention. As a result, marketers must shift strategy - and budget - to new tactics better aligned to address a new market reality. I wrote about the role of personalization in direct digital marketing on Monday as an emerging tool to satisfy this requirement. Personalization software, however, is not the only possible change emerging from a newfound respect for online retention.

One outgrowth of a focus on retention is for brands to offer new products and dip into new product categories. Two retailers, J. Crew and Payless, are already toe-dipping by adding new products and categories that they are not normally a go-to source for. J. Crew is getting into the wedding dress business with an entire retail location devoted to bridal products, and Payless is adding a beauty department this Fall. While there are substantial financial gains to be made by entering new markets, each company is also trying to find new ways to engage and retain existing customers.

Aside from entering new product categories, retailers are beginning to research and deploy technology that boosts the effectiveness of online retailing. While the aforementioned personalization is gaining tremendous momentum right now, tools for better targeting content and for testing content are on the upswing as well – and both are most effective when the marketing goal is retention.

As retention becomes a stronger marketing focus, data must be at the center of any strategic discussion. Many of the writers here at The Lunch Pail routinely contribute information on data’s importance for a good reason. The better the data is organized, and the closer it is to the content – in the same software platform – the better any retention marketing program performs. Regardless of which direct digital marketing channel a campaign is running in – email, mobile, or Web – when each are informed by strong data organization, a connected customer experience that promotes loyalty is the result.

The customer experience has gained tremendous attention and support within marketing organizations across myriad companies. Retention marketing is where direct digital marketing – with its inherently customer-centric data organization – shines. As many retailers seek new ways to reach their existing customer base, it is vital to make sure that marketing programs and campaigns are organized to focus on the customer and grow existing business.

Marketers, what direct digital marketing retention programs are currently working for you?

2 Comments

  1. Posted June 29, 2010 at 8:31 pm | Permalink

    Great post, you make an interesting point about how retention through engagement is becoming more important among marketers today.

    What do you think are some of the top problems marketers encounter when trying to engage customers?

    • Posted July 5, 2010 at 10:31 am | Permalink

      Hi Lionel, thanks for the comment and great question.

      Without leaping head first into a modern day marketing dissertation in the comments space, I think the single most important challenge marketers face is reconfiguring their organization to be better focused on the customer. While “customer-centricity” is one of those eye-rolling buzz words, there is a bit of truth in it. For marketers to achieve success today, engagement must be a priority. Engagement requires better listening to what customers want, which requires a central database that is also able to easily deliver content.

      The perspective on the customer, from the marketer’s view, must be realistic. Marketers are in denial to a degree about how the customer works, and that denial is reflected in how their organizations are built. Rather than all of the focus being on customers, the focus is on the communications channel. The thinking must be customer first, and then channel second. “What does this specific customer like? What is meaningful to them? How can I deliver value to this type of customer through mobile, email, and the Web?”

      Marketers must be willing to reevaluate their overall approach and adapt. It is an essential challenge marketers have faced since they were peddling snake oil from the back of a horse and buggy. It will be fun to see how this challenge, like all of those before it, is met.


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