According to Forrester’s annual survey, retention is creeping up the marketer’s list of priorities. We’ve all heard the stats about acquisition costing 10 times more than retention - but these are hardly new.
So what exactly is it that’s finally driven marketers to prioritize post-sale engagement - and what does this have to do with first-party data?
With covid lockdowns in place, consumers were spending more time at home, and this translated to a lot of time on devices. There was a huge spike in the number of people watching television, but also in streaming, and this included some of the less mainstream mediums and platforms. Podcasts blew up, Twitch audiences grew. Obviously having all these new avenues to capture consumers' attention presented an opportunity for marketers on the acquisition side, but in terms of retention this was a real spanner in the works.
Growing customers into advocates in the context of this competitive landscape was a major challenge - and actually, it still is. Because, what’s even more interesting than the jump in media consumption is that come late summer of 2021, as everything began opening up, consumers kept up with their media consumption. One survey found that 41% expected to keep up the same level of media consumption, even as the world opened up again.
The marketing landscape was already competitive, but getting consumers attention - and maintaining it during the pandemic was a whole other kettle of fish. That’s one of the key reasons marketers are making better use of first party data to build enhanced retention and loyalty based strategies.
The reality marketers are faced with isn’t just cookie depreciation, but ID depreciation - for example, what Apple, Google, Android, Firefox, and Microsoft Edge have done with their privacy preserving initiatives.
The walled gardens created by publishers and media groups once held highly effective, albeit siloed data. Media professionals and advertisers were reaping the benefits of using third party cookies, and behavior based data to target people relatively cheaply. But today, ID deprecation has made these much less effective. What complicates this even more is that the data outside of these walled gardens has been hardest hit by ID deprecation. Accessing data to build cross platform targeting and media measurement strategies has become incredibly difficult.
These privacy initiatives have pulled the rug out from under a lot of marketers who were relying on acquisition based strategies that target directly to known consumers or prospects, or within hyper-targeted cohorts. Marketers realize with the death of the third-party cookie they need to double down on first party data collection strategies if they want to target customers - and perhaps more importantly, if they want to tackle media measurement and attribution challenges.
Despite the value that returning customers bring to brands, marketing departments often have a tunnel-vision focus on presale and acquisition. This is partly because third-party cookies made it so easy to target prospective customers based on their behavior. But now that privacy laws are making this more difficult, marketers are waking up to the importance of investing time and money on their retention and loyalty strategies.
Loyalty marketing at the moment mostly focuses on customer experience. Often, CX teams will analyze their best customers and use data driven journey maps to anticipate what they’ll need next. However, CX principles are starting to be applied more broadly as companies realize that each team plays a part in creating a positive customer experience.
There’s currently a gap to make use of first party data and other cross-functional data points to improve CX within marketing messaging and promotion. As first party data becomes more of a focus, we can expect to see more brands making use of it not just for CX in the traditional sense and retention, but for marketing acquisition as well.