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BizReport : Loyalty Marketing : September 21, 2016

Retentionomics: The impact of customer retention on market share

Increased investment in customer retention leads to significant growth in market share, according to new research from Forbes and Sailthru.

by Helen Leggatt

The Forbes/Sailthru inaugural Retentionomics study, which gained insight from 300 global CEOs plus media and retail executives, found that those brands that upped their spend on customer retention over the past one to three years drove a 200% higher chance of growing their market share.

Furthermore, brands who focused on customer retention were found to be nearly 50% more likely to consider projected long-term profitability growth when making customer strategy decisions and the associated management teams were twice as likely to comprehend the impact of customer lifetime value on revenue and growth. However, just 15% of the polled companies admitted to being able to tie the calculation of customer lifetime value to revenue and growth.

"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, 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.

A lack of memorable marketing was cited by 51% of those brands who had failed to retain customer loyalty as being a major cause, while 40% cited the lack of a seamless omni-channel shopping experience.

"The work we have done together with Sailthru to surface the connection between retention and revenue is of such significance that it should spark dialogue at all levels within retail and publishing organizations," said Bruce Rogers, Chief Insights Officer and head of the CMO Practice, Forbes Media.

Tags: customer analytics, loyalty, research, retention

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