Who are your best customers, and how do you keep them engaged? Communications and digital media marketers struggle with this constantly. Consumers are breaking away from traditional media consumption, making marketers’ jobs even harder. According to Deloitte’s Digital Democracy Survey, almost half (49 percent) of U.S. consumers now subscribe to paid streaming video services — but 40 percent of the time they stream video, it’s from a free service. Competing on price seems tempting, but it ultimately lowers margins and attracts customers who are only looking for the least expensive option for entertainment.
There is a better way to acquire and retain high-value customers, but it’s not what you’d think — and it’s not as easy as it sounds. Instead of appealing to the price-shopping consumer — which is increasingly difficult in the face of constantly shifting consumer behavior and expectations — forward-thinking communications marketers are turning to big data and analytics to recruit and keep customers. However, this can be difficult in light of three factors:
1. There is often too much data — but somehow it doesn’t provide the right insights.
Either your organization is drowning in data, or it has data to analyze but is not drawing actionable insights into existing and prospective customers. If you’re lucky, you’re wrangling both issues but you may still be going nowhere. You may have massive data on your customers’ habits and past purchases, and you may have data from other sources, but that doesn’t necessarily help upsell them, keep them engaged, or retain them as customers.
You might even be leery of introducing more data into your organization. If the data you already collect isn’t providing insight, could more data just be throwing gasoline on the fire, leaving your acquisition strategy a hot mess? That’s one of the biggest pitfalls of survey-based or self-reported data, and it’s why many marketers are turning to economic data derived from financial institutions to better predict customer behavior. Such data is far more reliable than data from brokers that may have merely surveyed customers, and it provides richer customer acquisition opportunities.
2. Keeping up with modeling and predictive analytics can be costly.
Having reliable data is great, but if you can’t analyze it, it’s actually costing you money to manage it. And with new advances in modeling and predictive analytics, it can be costly to keep up with the latest technology in-house. It requires not only the technology itself, but also analytics and data modeling experts, which can cut into the bottom line you’re trying to boost. Consumer behavior changes rapidly, and tweaking your data models to keep up with their movement takes time and money.
However, predictive analytics are all too important in marketing. According to a report from Forbes, 86 percent of companies that use predictive analytics are seeing a positive return on investment. The report also found that 46 percent of these companies are using customer retention rate as a metric for predictive analytics success. To reap the benefits of predictive analytics, companies are turning to solution providers that have invested in innovative analytic technology and models that will keep them ahead of consumer behavior — and ahead of the competition.
3. Customer churn is all too real.
Remember that pesky “competing on price” model? Your lower-value customers will be swayed by less-costly and free alternatives, and knowing who those customers are and when they’re likely to leave lets you better calculate their admittedly short lifetime value. So it makes sense to go after high-value customers or retain them. Third-party data that includes household financial information, combined with your transactional data, offers insight into the potential of your existing customers. It’s likely that you may have high-value customers that you don’t realize, or can identify prospective customers, and financial data fills that gap.
Then, you can use that data to leverage predictive analytics and retain those customers.
According to the FIS 2016 PACE Index, 70 percent of consumers expect a major life event to affect their finances in the next three years; having data that can help predict those events keeps you ahead of the curve.
It may seem like a challenging undertaking, but the right data and analytics partner can provide the solutions you need to identify valuable customers and discover how to appeal to them. You’ll know who to target for new subscriptions, bundles, and promotions; when to target them; and how to market to them.
Download our checklist, “Sizing Up Your Customer Acquisition Strategy: A Guided Self-Assessment for Communications Marketers” to take your organization’s pulse, then contact us to learn more about what Data-driven Marketing solutions from Equifax can do for your customer retention and acquisition strategies — and your bottom line.
The post Finding (and Keeping!) Your Best Customers: Three Reasons Why It’s Even Harder Than You Think appeared first on Insights.