Investing in customer retention can lead to significantly increased market share -- study

by Ryan Smith15 Sep 2016
Marketing isn’t just about gaining customers – it’s about keeping them. And a new study from Forbes Insights and Sailthru has found that investing in customer retention can lead to significantly increased market share.

The study surveyed 300 CEOs and media and retail executives. It found that companies that increased their investment s in retention “realize significant advantages in increasing market share, managing customer churn and optimizing acquisition over those that invest primarily in customer acquisition,” according to a news release.

The study found that retailers and publishers that increased their spending on retention in the last 1-3 years had nearly a 200% higher likelihood of increasing their market share than companies that spent more on acquisition. And companies focused on retention were nearly 50% more likely to consider projected long-term profitability growth when planning customer strategy.

“Too often, executives and marketers focus their efforts on short-term growth and we're seeing the impact of that in retail and media company earnings reports,” said Neil Lustig, CEO of Sailthru. “There are many studies that document the potential of retention, but none that dive into how well retail and media companies understand the economics of retention. The Retentionomics study validates that focusing on high-quality customers is a more efficient way to reach sales and revenue goals than simply delivering new customers. The most successful modern marketers invest in and set specific retention goals, measure the value of their valued customers through that lens, and use that data to inform their acquisition strategies and deliver sustained profitable growth.”


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