The Future of Customer Retention – 3 Tips from Top Marketers
Customer retention vs. acquisition is always a hot topic of debate amongst marketing professionals of all levels. Should your marketing campaigns be focused on your existing customers or is chasing new business the best use of your resources? At our PostFunnel Forum in New York three high-level executives hashed out the future of CRM Marketing over finger foods and craft cocktails.
It was not your typical Monday night when Optimove’s VP of revenue, Scott McNabb, introduced three panelists at the Good Behavior rooftop located in the heart of Manhattan. The reason for the event? An evening of lively discussions centered around the future of customer retention. Let us take a second to meet the panelists for those who missed it…
- Matthew Hilger, Product Senior Director – FanDuel: Introduced as a “poker pro”, Matthew is a Texas Hold ‘Em champion who’s written not just one, but three best-selling poker books. Today, he is the Product Senior Director at FanDuel, a top performer in US gambling.
- Merv Huber, Growth Marketing – Scientific Games: A long-time fan of horse racing, Merv specializes in B2B2C marketing for some of the top lotteries across the globe, currently leading growth marketing efforts at Scientific Games.
- Laura DePaoli, VP of Marketing Operations – Staples: Although her background is in lab technology, Laura’s dynamic career has allowed her to dive into work on all levels of the marketing chain from supply to merchandise and now, as the Vice President of Marketing Operations at Staples.
Different industries, same problems
Now you may be wondering – what do gaming and retail marketers have in common with one another regarding customer retention? What can a company like Staples – who is relatively new to the automated marketing game – learn from iGaming platform marketers? Well funny you should ask -because we’ve got the all the details for you.
A mature retailer like Staples dominates in retention with a 70% rate while maintaining only a 30% acquisition rate. Perhaps they can thank their brick-and-mortar origins that have built customer trust and therefore, made shoppers more willing to return.
But the challenge posed for Staples is converting in-person shoppers into online customers in order to better personalize the customer experience and target their campaigns. The iGaming industry faces its own retention challenges. With very little to differentiate between them, how can iGaming brands maintain brand loyalty? It’s a pickle across industries. So what do you say, panelists? What are your best tips for increasing customer retention?
A nod to storefront credibility
Do you know that old phrase, “Credibility starts with a C (see)?” FanDuel does. “People may not know, but FanDuel has about 25 retail locations,” said Matthew. “We don’t have the physical branding that [Staples] does, but this is a very key part of our strategy – not so much from a revenue standpoint.”
So if your storefront isn’t contributing to revenue, what gives? Why have one at all? Consider the ‘banking analogy’ – the notion that even if you conduct business with your bank solely online, knowing that a physical building exists shows that they can be trusted with something as valuable as, well, all your financial activity. This is invaluable to proving company stability for both retailers and gaming operators alike.
Because let’s get one this straight – customers are more likely to return if they know they can trust you.
Customer patterns change with the seasons
Predicting changes in customer behavior is key to understanding best-practices in retention – regardless of what industry you’re in. For a company like Staples, back-to-school season causes a shift in customer behavior that is predictable and fundamental to how they campaign during that season. For Scientific Games, it’s the Powerball. FanDuel? The World Cup.
“I challenge you all to look at your market data and make sure you’re not missing those small seasonal events because all those little wins are how you measure if your business is running well,” noted Laura.
And how marketers campaign during acquisition spikes is key to a sustainable and fruitful business model to keep them coming back.
What you cannot predict – and what you can
“I think we got [about] 60,000 first time depositors in January 2021 – about four times more than we’d ever gotten in any previous month,” said Merv about what was a huge jackpot lottery at the time for Scientific Games. “You can’t plan for something like that in your calendar as much from the acquisition side, but you can plan for it on the retention side.”
The importance for a strong marketing plan for turning acquired customers into retained ones is where all panelists found common ground. Although they may not always be able to predict an influx of new business, they can use Optimove’s CRM Marketing hub to create lookalike audiences to improve acquisition and predictive models to anticipate consumer behavior and boost retention rates.
Investing in existing business is a priority for marketers across all industries. Predictability and personalization are fundamental to a stable retention marketing model – especially when Cost of Acquiring a single client is 5 times higher than retaining an existing one.
So what have we learned? Marketing challenges are often similar across industries. Another thing we can agree on? Open bar is a nice thing. Upon the panel closing, both gaming and retail marketing attendees and panelists closed in by the bar to discuss their surprise that they have