The other day I got an offer in the mail to renew my subscription to a magazine I have been subscribing to for years. In the same batch of mail came another offer from the same magazine, treating me as a potential new customer. I opened both envelopes. The subscription price I would have to pay as a new subscriber was significantly lower than the one offered to that other me, the loyal long-term reader.
So I have two questions:
- Why are you charging the old, loyal me more than the new, untested me?
- And why don’t you know that I already am your customer? (Though if you treat me this way, you may lose me.)
A recent report from Forbes Insights and Sitecore, “Customers for Life: Technology Strategies for Attracting and Keeping Customers,” helps to answer these questions. In July 2014, Forbes Insights, in association with Sitecore, surveyed 312 senior executives from across North America and multiple industries to better understand how organizations nurture the customer lifecycle; the tools used, the strategies employed and the decision makers involved—and where gaps exist between intention and implementation.
So am I really that much more valuable as a new customer? I am more expensive,that’s for sure.
Harris Interactive ’s research shows that not only is it six to seven times more expensive to acquire a new customer than to keep an existing one, but that 86% of consumers will pay more for a better experience. And yet organizations on the whole are slow to wake up to the bottom-line benefits of attracting customers for life, and even slower to allocate the resources necessary to do so.
Companies recognize the importance of keeping customers for life, but are still focusing more on new customer acquisition for revenue growth. While 94% of respondents indicated keeping customers for life is prioritized at some level within their organization in relation to other business goals, 49% are unhappy with their current marketing technology’s ability to support those goals.
While top marketing priorities include customer retention and obtaining a single view of the customer, more still prioritize acquisition. Only 38% are primarily focused on repeat customers for revenue growth, while nearly half (49%) are still focused on new customers.
That explains why the offer for the new me, an acquisition, was so much better than the offer to retain me.
But why did the magazine company in question not know I am their customer? Why don’t they realize I am the same person?
While there is just one of me, developing a single view of one customer is a holy grail for many organizations.
Developing a single customer view is a top organizational priority, but technical challenges—including a multiplicity of systems, fragmentation of data and the resulting silos—slow progress. Only 16% do not consider a single view of the customer a priority, while 53% consider it a high to very high priority.
The biggest challenges to developing this 360-degree view are difficulties with keeping track of data among multiple systems, data redundancies and silos. On average, organizations use 36 different data-gathering systems and vendors for marketing efforts. Only a quarter (24%) of all respondents felt customer communications and data gathering systems were fully integrated for the purpose, with 13% reporting no level of integration at all.
Silos and a lack of integration among teams also pose challenges to the delivery of seamless, personalized customer interactions. Just 37% of respondents say the teams responsible for customer acquisition and interfacing, regardless of lifecycle stage, are fully integrated. Half (49%) of all respondents indicate marketing and data teams are siloed.
The top challenges to more-integrated ways of communicating with customers include a lack of willingness to collaborate cross-team, and insufficiently evolved talent or technical capabilities to warrant integration. That said, solving the lack of integration by developing a single, centralized system to house, access and utilize customer data is seen as a high to very high priority.
Are companies going to get it right?
Before they do, I have a choice to make—between the new and old me. What do you think I am going to do?