Customer retention metrics still often overlooked, survey finds
Catalog companies have known for a long time that it’s far less expensive to retain a customer that to acquire a new one – yet a surprising 52% of marketers recently surveyed online by analytics provider WebTrends/Net IQ Corp. in partnership with Drilling Down, a Florida-based firm that analyzes customer behavior, don’t currently measure customer retention. Only 28% look at repeat visit and purchase rates, only 16% segment customers based on the retention-specific metrics of frequency and latency, and only 3% do detailed cross-channel marketing analysis, according to the survey of more than 500 respondents.
Some 31% of those surveyed don’t measure the results of search marketing campaigns, while only 41% even measure click-through and general traffic. Only 16% measure web activity through to conversion, while only 11% have competed a detailed ROI analysis of campaigns including lifetime value of phrase by revenue.
“The web is in its early cycle and people are just beginning to understand the power of how it all works together,” says Drilling Down consultant Jim Novo. “Most companies are excited to be acquitting customers and doing it profitably. That’s what everyone has been focused on. But that doesn’t mean they`re allocating marketing money in the right place, because a lot of those customers might buy just one time."
Having seen results from pay per click online campaigns to acquire customers, Novo says, marketers’ task now is to figure out how to keep those customers without having to pay for them over and over again. Different versions of similar search phrases can generate different values of search customers, for example, while traffic delivered by one search engine can ultimately more valuable that traffic delivered by another because it may tend to produce more repeat buyers. WebTrends recently added search engine enhancements that measure the lifetime value of a paid-for keyword, as well as measure the value of paid search campaigns versus traffic that comes to a site naturally, Novo notes.
Much of the science of customer retention comes from what’s been learned in the catalog industry, he says. That puts companies such as The Shaper Image, with catalog roots, out ahead in implementing customer retention programs online, he notes. “The good news is that what works for catalogs works even better online,” he says. “Because everything is electronic, the information needed to implement these retention programs is always available.”
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