Now you’re just someone that I used to know

Most senior executives will readily agree that it is expensive and difficult to acquire new customers.

Most will agree that it takes considerable time and investment to build deep insight, create trust and engender loyalty with a customer.

And most will agree that customer value is generally pretty well correlated with duration as a customer.

Most will therefore conceptually agree that retention of valuable customers should be a strategic priority.

So….?

So how come you can’t show me a report that details the % of sales and profits represented by customers that defected during the last 12 months?

So how come you don’t have any analysis of the drivers of defection, highlighting the addressable factors along with action plans to mitigate?

So how come your performance reviews and bonus plans don’t have any retention goals?

How is it that you can spend the shareholders’ money to create awareness, generate trial, promote repeat and progressively build a deeper, more personalized relationship and then just let them become someone you used to know?

Well?

Author: stevenpdennis

Steven Dennis is a trusted advisor and thought-leader on customer-centric strategic growth and innovation. As President of SageBerry Consulting, he applies his C-level executive experience to drive growth and marketing strategy for multi-channel retail, e-commerce and luxury industry clients. He shares his ideas and wisdom regularly in the press, as an industry speaker and through his popular blog "Zen and the Art & Science of Customer-Centricity"(https://stevenpdennis.wordpress.com/). Prior to founding SageBerry, Steven was Senior Vice President of Strategy, Business Development and Marketing for the Neiman Marcus Group. As a member of the Executive Committee he drove the company's major growth initiatives, multi-channel marketing programs and customer insight agenda. Before joining Neiman Marcus, Steven held leadership positions with Sears, including Acting Chief Strategy Officer, Lands' End acquisition integration team leader, Vice President-Multichannel Integration and General Manager-Commercial Sales. Earlier in his career he was with NutraSweet and the global management strategy consulting firm, Booz & Co. Steven received his MBA from the Harvard Business School and a BA from Tufts University. In addition to his consulting work, Steven is an executive-in-residence at the JC Penney Center for Retail Excellence at SMU’s Cox School of Business, President of the DFW Retail Executives Association and serves on the Advisory Boards of Invodo Inc. and Nectar Online Media. He is also active in the social innovation and education reform arena as a Partner and member of the Board of Directors of Dallas Social Venture Partners. He is currently co-leader of DSVP's investment and engagement with SMU's Center on Communities and Education "School Zone" initiative in West Dallas.

4 thoughts on “Now you’re just someone that I used to know”

  1. Steven,

    Great post, written like a true passionate direct marketer! It is amazing in this day and age that folks with ACCESS to transactional data still cannot get it right. Love to see them in my regulated world of Pharma.

    John Wes Green

    Like

  2. Thought provoking post Steve. We have a two-tier customer in the school uniform business: 1) The school, which contracts with us to supply their families, and 2) The families, which actually purchase our uniforms in our 40 retail locations or websites.

    In this environment, retention and defection are very easy to recognize and measure for tier 1, but very difficult for tier 2. Firstly, there are many factors outside our value equation that can cause defection of tier 2 (consumers). Secondly, we have an extremely seasonal business, based on the weeks surrounding back to school, and very low purchase frequency.

    Thank you for your insights.

    Like

  3. Great post, Steve. I’m tweeting about it already. We see a lot of this in our marketing ROI modeling business. Defection measures are powerful, and even more useful are the insights derived from market research among the defectors themselves.

    Like

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