Three ways data improves Customer Retention

The amount of data now available to us is overwhelming: every two days we create as much information as we did from the beginning of time until 2003. As a Marketer, the challenge is determining what data is useful and how to turn it into marketing wisdom that leads to Customer retention and growth. Considering thatit costs 5 times as much to on-board a Customer than it is to retain one, companies would do well to leverage their data to develop and drive retention strategies.

In this post, I look at 3 ways data can be used to build and drive customer retention strategies that result in reduced churn rates and open new avenues for meaningful engagement with target markets.

Companies need to sift through their base and identify the right customers to retain. How? By listening to what their data tells them about their customers. With the convergence of multiple data channels – from purchasing preference, value and frequency – businesses are able to filter their customers from most to least valuable. For example, store card data helps large retailers segment their markets and determine Customer Lifetime Value (CLV) with considerable accuracy and allows them to take a personal approach to each customer's propensity to churn. If a relatively high and frequent spender suddenly stops using their store cards, retailers can then look into root-causes and develop targeted retention strategies to get particular customers to re-engage.

Add to this credit data that helps identify financial motivations behind customer disengagement, and retailers get a clearer picture of causalities and can make informed decisions on implementing retention strategies around certain customer types – or not.

Read our blog on customer retention strategies and why its time to get personal

By analysing metrics such as purchase habits, product ratings and reviews, e-commerce retailers can channel individualised messaging to millions of customers worldwide. Data analytics aids in creating brand stories that are relevant to each market segment and results in more individualised messaging that carries true weight with consumers.