The prolonged lockdown to counter the spread of COVID-19 has been lifted or is being eased in phases. Businesses are resuming operations in whatever capacity possible, but uncertainty is still staring everyone dead in the eye. The conundrum to save money wherever possible in case things get worse or to grab the attention of customers is plaguing the marketers and executives all around. Some companies have completely frozen their new customer acquisition and customer retention budgets and plan to wait out till they deem it safe to resume.
Freezing Customer Retention Budgets May Be the Wrong Idea
Freezing customer retention budgets will land these businesses in trouble. A survey by American Association of Advertising Agencies states that 43% of consumers find it reassuring to hear from brands during this lockdown. Without an allocated budget, the business will not be able to reach out to their customers. So, a competitor could market to the business’ customers and steal them away, leading to a reduction in business. This is a perilous situation for any business.
In our last blog titled Is It Possible to ‘Pandemic Proof’ Your Business?, we emphasized how an engaging customer loyalty program can set your business up for steady growth. A good loyalty program has many facets. The most important aspect of any customer loyalty program is the use of targeted marketing campaigns to increase customer acquisition and retention.
Customer Loyalty Programs: The Silver Bullet for Growth
To achieve effective targeting, data science and user segmentation can make all the difference. Data analysis can help you setup an optimized customer loyalty program. Machine learning techniques can use insights from customer buying behavior to segment loyal customers into user clusters. A separate promotion strategy specific to each user cluster is an efficient way to customer retention budgets. This clustering and targeting technique, enables businesses to maximize revenue from existing customers.
With marketing budgets being tighter than ever, user segmentation will help marketers use their budgets efficiently. With businesses currently struggling with reduced revenue, loyalty programs operating with efficient customer retention budgets can prove to be their silver bullet for growth. Retention is the new growth. With a targeted approach, businesses can be the success story that others want to emulate.
