In the ever-evolving landscape of marketing, and specifically in e-commerce, the focus on acquiring new users has traditionally taken precedence. A poll shared on LinkedIn revealed that 49% of marketing leaders prioritize acquisition, while 30% focus on monetization and 21% on retention. However, the dynamics of customer purchase behaviours have shifted, particularly due to the impact of the COVID-19 pandemic and subsequent economic uncertainties. This has forced industries to approach a re-evaluation of growth strategies, with preserving revenue from existing customers becoming a critical element in the net revenue equation.
One key shift in strategy involves closer collaboration between marketing and product teams. While sales and marketing have historically been close partners, the rise of digital products necessitates a more integrated approach. "Product-led growth" emphasizes connecting the audience to the product early on, requiring increased collaboration between marketing and product teams. Breaking down silos and fostering collaboration is crucial for a successful retention-first strategy. A product that handles itself throughout the customer journey is key as well, with automations being a great tool to achieve this.
Team alignment alone is not sufficient; a common data set is essential for driving discussions. CRM platforms like HubSpot have understood the evolving landscape and have shifted to a ‘source of truth’ system approach, allowing collaboration with shared data to be their focus. This allows for teams to pro-actively work together instead or re-actively shift their actions.
The challenge lies in the fact that marketing metrics often focus on acquisition, while product teams concentrate on activation and engagement. To effectively implement a retention-first strategy, shared metrics and visibility into the entire customer journey are necessary. Both product and marketing teams must work together to leverage user behaviour data to understand what features and experiences drive customer retention and repeat purchases.
A successful retention-first strategy requires a commitment to creating engaging experiences both within and outside the product. This two experiences should work seamlessly together, providing personalized interactions across external emails, social media, and advertisements. Examples from digital-first companies like Canva, Zoom, and Dropbox, which have adopted product-led growth, showcase the effectiveness of such strategies.
As we witness a revolution in marketing strategies, it is anticipated that more traditional enterprises will prioritize retention in the years to come. The evolving landscape emphasizes the need for marketers to adapt, collaborate, and leverage data-driven insights to drive growth in an era where customer retention takes centre stage. The revolution is underway, and we're just scratching the surface.
Bibliography:
https://www.forbes.com/sites/forbescommunicationscouncil/2023/11/13/its-time-for-marketers-to-prioritize-retention/?sh=763dd3e29d28
