The Art & Science of Retention
History reports that when asked how he came to create his masterful sculptures, Michelangelo answered that he didn’t chisel away the marble to carve out the life-like figures, so much as remove the stone that was covering up the figure trapped inside. That his task was not to enforce his will rather it was to liberate.
Whether we chose to believe the story or not – it comes to punctuate the essential quality of a successful retention program. That of creating a balanced harmony that seeks to free customers to make their choices based on deeper level desires to partner with the brand for its innate benefits rather than a reliance on some “forced” bind.
In the coming installments I hope to review some of the critical facets of customer retention. As always, this is a personal journey that I undertake for my own self indulgence/enlightenment and so I am thrilled (and amazed) that you have found this post amongst the billions of web pages. I hope you enjoy your stay and find some value.
Retention is the new Acquisition
How a business comes to retain its customers is coming under increasing scrutiny and urgency.
To this point, customer retention has been viewed by managers as a fairly certain brand outcome – the result of habit, convenience or daisy-chained probabilistic response to marketing offers. However the normative certainty of yesterday is being transformed by the weight of the new world-flattening reality.
The flat world notion, popularized by Thomas L Friedman describes how global supply chains, global production, technological advances and the internet have brought us to the point at which the risk of technical product failure and the speed at which innovation is copied has given rise to a growing pool of ‘good enough’ brands that consumers can purchase with confidence.
To begin to cope with this shift in the brand power structure, the traditional ways of doing business are being supplanted by new practices. Following in the school of Peppers and Rogers (Click here for Chapter 1:Return on Customer) these adherents embrace a more pervasive customer-centric approach. They argue that failing to gain greater customer intimacy or worse still, soliciting customers with irrelevant offers or poor or inconsistent service has a far greater long-term impact on the corporation’s financial results than previously recognized. That the quality of a business is ultimately defined by the kind of relationship they share and support with their patrons – in a word – retention.
How a retention program succeeds will be determined by the intersection of two viewpoints – that of the buyer AND that of a seller along the transaction-relationship continuum. A continuum that is defined by the attitudinal quality of the relationship as it moves from the wallet, to the mind, to the emotion of the purchaser transforming the relationship dynamics from a buyer/seller to a valued customer to an integral partner.
So while retention can be mathematically defined by the share of requirements satisfied supported by ever more sophisticated offer solicitation, it will be the underlying psychology of the relationship (which colors and skews the behavior by both the enterprise and the patron) and the signals/lessons sent through each others actions that will ultimately have the greatest impact/bearing on (the profitability of) results.
Retention used to be the applause of customers… today it’s the ticket to the show …a privilege that is earned with every purchase. The past, present and future of the brand at stake at the Moment of Truth …brand relevancy…competitive sets…barriers to entry/exit…stickiness – all of these things in a state of flux beneath the seeming simplicity of the financial stream that the stock holder appointed priests of shareholder value maximization seek to sanctify.